
Figure 17.9 Efficiency in the Market for a Public Good
The two consumers of a public good have marginal benefit curves
MB1 and
MB2. At the efficient point, both consumers consume
Q*Pub of the public good, where their total marginal benefit curve (
MBT) intersects the marginal cost curve (
MC). If the two consumers privately bought the good, each would consume less than the optimal level at quantities
Q1 and
Q2, where
MB1 and
MB2 each intersect
MC.