Suppose the marginal cost of a pure public good increases as more is purchased by a community.

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Suppose the marginal cost of a pure public good increases as more is purchased by a community. Prove that the Lindahl equilibrium will result in a budget surplus at the efficient annual output of the pure public good.

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Public Finance A Contemporary Application of Theory to Policy

ISBN: 978-1285173955

11th edition

Authors: David N Hyman

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Question Posted: Aug 22, 2015 03:17 AM

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Suppose the marginal cost of a pure public good increases as more is purchased by a community.

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The sum of the marginal benefits must equal the marginal cost in the Lindahl equi...View the full answer

Public Finance A Contemporary Application of Theory to Policy

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