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Microeconomics II
book

Microeconomics II

by D.N. Dwivedi
August 2011
Intermediate to advanced content levelIntermediate to advanced
368 pages
14h 51m
English
Pearson India
Content preview from Microeconomics II
328 Chapter 16
ecient level of output is determined where marginal cost equals marginal benets. e same principle
applies to public goods also but analysis is dierent, especially with respect to marginal social benet.
As regards the marginal cost (MC), since total cost remains constant, is zero for additional consum-
ers. For example, total cost of road construction does not increase with increase in population in the
area. erefore, marginal cost for additional consumer is zero. e xed marginal cost is shown by the
horizontal line marked MC in Figure 16.2.
However, there is a dierence in the method of working out the marginal benets
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Publisher Resources

ISBN: 9788131797655