Asked by Navpreet singh on May 07, 2024
Verified
The optimal level of provision of public goods is where societyʹs total willingness to pay per unit is equal to the
A) total cost of producing the good.
B) average cost of producing the good.
C) variable cost of producing the good.
D) marginal cost of producing the good.
Optimal Level
The most efficient, effective, or desirable point or state for a specific circumstance or variable.
Willingness to Pay
Willingness to pay represents the maximum amount an individual is prepared to spend to acquire a good or service.
Marginal Cost
The boost in total charges linked to the creation of one more unit of a product or service.
- Illuminate the contrast between the variable cost of producing goods and the communal propensity to financially support public assets.
Verified Answer
SD
Sejal DaradeMay 09, 2024
Final Answer :
D
Explanation :
The optimal level of provision of public goods occurs where society's total willingness to pay per unit equals the marginal cost of producing the good. This ensures that the resources are used efficiently, providing the maximum benefit to society without wasting resources.
Learning Objectives
- Illuminate the contrast between the variable cost of producing goods and the communal propensity to financially support public assets.