In the context of public goods, the 'Lindahl Equilibrium' is characterised by:
A. Personalised prices (Lindahl taxes) such that each individual demands the same quantity of the public good and the sum of prices equals marginal cost
B. A single uniform price for the public good
C. Zero provision of the public good
D. Private provision only
Answer: Option A
Solution (By JKSSB Mock Tests)
In a Lindahl equilibrium each individual faces a personalised price for the public good equal to his or her marginal benefit; the sum of these prices equals marginal cost and all individuals agree on the quantity.
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