Ask Question
25 November, 20:18

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?

+1
Answers (1)
  1. 26 November, 00:14
    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 you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers