Ask Question
7 June, 13:17

The marginal cost of producing 40 units of a public good is $200. There are two individuals in the society. Person A is willing to pay $80 for 40 units of the public good. If 40 units of the public good are provided, how much must Person B be willing to pay?

+2
Answers (1)
  1. 7 June, 13:43
    0
    Person B must be willing to pay $120

    Explanation:

    Marginal cost = $200

    Person A is willing to pay = $80

    Marginal cost is the cost which a company incurred for producing one extra unit of goods.

    If person A has paid $80, then person B must pay an amount that will cover up for the marginal cost the company incurred.

    That mean person B will pay $120,

    Meaning; $80 + $120 = $200
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The marginal cost of producing 40 units of a public good is $200. There are two individuals in the society. Person A is willing to pay $80 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers