In a two-person economy (Individuals A and

A pure public good is non-rival, so all individuals consume the same quantity G. The social marginal benefit is therefore obtained by adding the individual marginal willingness to pay vertically (for a private good we add demand curves horizontally). The Pareto-efficient level is given by the Samuelson condition: Sum of MWP = MC MWP_A + MWP_B = (10 - G) + (15 - 2G) = 25 - 3G 25 - 3G = 15 3G = 10 G* = 10/3 = 3.33 units We should check that both individuals have a positive MWP at this level, otherwise the vertical summation is not valid. At G = 3.33, MWP_A = 6.67 and MWP_B = 8.33. Both are positive, and 6.67 + 8.33 = 15 = MC. This also shows the under-provision problem. If A had to pay alone, 10 - G = 15 would give a negative G. If B had to pay alone, 15 - 2G = 15 would give G = 0. Neither would supply the good, although the efficient level for the two together is 3.33. Hence the correct option is (B).