In the context of public goods, the 'Lindahl Equilibrium' is characterised by:
A.Private provision only
B.A single uniform price for the public good
C.Zero provision of the public good
D.Personalised prices (Lindahl taxes) such that each individual demands the same quantity of the public good and the sum of prices equals marginal cost
Explanation:
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.
Explanation:
A consumer is in equilibrium when the marginal utility derived from a commodity equals its price (or MU per unit of money is equalised across commodities).
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