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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.