Which of the following is true of the market demand for a public good? A. The ef

Question

Which of the following is true of the market demand for a public good?

A. The efficient quantity of a public good produced occurs where the market demand curve intersects the market supply curve.

B. The market demand curve for a public good is the sum of the quanities demanded by each consumer at a given income level.

C. The market demand curve for a public good is the vertical sum of individual consumer's demand curves.

D. The market demand curve for a public good is the horizotal sum of individual's consumer's demand curves.

Explanation / Answer

The market demand for a public good is the vertical sum of individual consumer's demand curves. The verical summation gives the amount the people are willing to pay for a given quantity of public good.

The correct option is C. The market demand curve for a public good is the vertical sum of individual consumer's demand curves.

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