The figure below shows marginal benefit curves for a public good. Bob and Barb are the only two people in society. The cost of the good is $8 per unit. What is the marginal social benefit of the 2nd unit? P 10 8 6 4 2 MB Bob MB Barb 2 4 6 8 Quantity
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For a public good, the marginal social benefit (MSB) is the vertical summation of individual marginal benefits (MB) at each quantity. This is because all individuals consume the same quantity of the public good, and the total benefit to society is the sum of the Show more…
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