In the context of public goods, the 'Lindahl Equilibrium' is characterised by:
A.A single uniform price for the public good
B.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:
Average fixed cost falls continuously with an increase in output because total fixed cost is spread over a larger number of units; the AFC curve is a rectangular hyperbola.
Explanation:
Average Propensity to Consume (APC) = Total Consumption / Total Income. Marginal Propensity to Consume is the change in consumption divided by the change in income.
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