Which of the following is true of the marginal cost of providing a pure public good to one more consumer?

Question

BlackTom AI · Accepted Answer

When thinking about a pure public good, the key feature is non-rivalry: one more person consuming the good does not reduce the amount available to others. 
Option 1: 'It is positive.' This would imply that supplying the next unit to an additional person costs something in a way that reduces others' consumption, which contradicts non-rivalry and the standard public-goods framework. 
Option 2: 'It is equal to zero.' Under non-rivalrous provision, the marginal cost of providing the good to one more consumer is zero because the already produced amount can be used by anyone at no additional cost per extra user. This aligns with the typical textbook result for pure public goods. 
Option 3: 'It is equal to the original cost of the good.' The initial production cost is a fixed cost or a total cost for the chosen quantity, not the incremental cost of one more consumer; the marginal cost is not simply the upfront fixed cost. 
Option 4: 'It decreases as the number of consumers increases.' For a public good, the marginal cost of serving an additional user does not typically decrease with more users; the key point is that it is zero, not that it falls over time. 
Option 5: 'It increases as the number of consumers increases.' This would imply that each extra user raises the cost, which contradicts the non-rivalry assumption where additional users do not raise the cost per extra user. 
In summary, among the options, only the claim that the marginal cost of providing a pure public good to one more consumer is zero is consistent with the defining property of pure public goods.

Which of the following is true of the marginal cost of providing a pure public good to one more consumer?Single choice

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