Suppose the government is producing a public good. If the marginal benefit of the last unit...
Suppose the government is producing a public good. If the marginal benefit of the last unit of a public good produced is greater than the marginal cost of that unit, to achieve the efficient amount of production, what should be done?
A.
The government should produce more units.
B.
The government should cease production.
C.
Private firms should take over the production and sale of the good.
D.
Nothing because the government is already producing the efficient quantity of the public good.
E.
The government should produce fewer units.
Homework Answers
Government is producing public good and if marginal benefit of last unit is greater than marginal cost then
A) government should product more units
If government increases production total benefit will increase so, should increase production.
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