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    Question

    The optimal quantity of the Public good to be produced

    is given by
    A Any point on the marginal social benefit curve Correct Answer Incorrect Answer
    B Any point on the marginal social cost curve Correct Answer Incorrect Answer
    C Marginal Social benefit = Marginal Social Cost Correct Answer Incorrect Answer
    D Marginal Social benefit > Marginal Social Cost Correct Answer Incorrect Answer

    Solution

    For public goods, the demand curve is the marginal social benefit curve and the supply curve is the marginal social cost curve. The optimal quantity of the Public good to be produced is given by MSB=MSC.

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