Economics · Public Goods
The Samuelson efficiency condition for the optimal provision of a pure public good states that production should be carried out up to the point where the marginal cost (MC) equals the sum of individual marginal benefits. Assuming MB i is the marginal benefit of individual i and MB j represents the marginal benefits accruing to all remaining individuals from j = 1 to n-1, which equation represents this condition?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1MB i - Σ j=1 n-1 MB j > MC
- 2MB i - Σ j=1 n-1 MB j < MC
- 3MB i + Σ j=1 n-1 MB j > MC
- 4MB i + Σ j=1 n-1 MB j = MC✓
Correct answer
MB i + Σ j=1 n-1 MB j = MC
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