Public Goods & Vertical Summation

Choose a Scenario

Marginal Cost per unit: $5

$2$14

WTP declines by 50% for each additional unit (diminishing marginal utility).

Alice's Base WTP: $6

$2$14

Bob's Base WTP: $4

$2$14

Carol's Base WTP: $5

$2$14

Non-rivalrous: everyone consumes the same unit
Non-excludable: can't prevent free-riding
Summation: Vertical — add WTP at each quantity

Rivalrous: each unit goes to one person
Excludable: non-payers can be blocked
Summation: Horizontal — add quantities at each price

Samuelson Rule: Provide the public good up to the quantity where the sum of individual WTP equals marginal cost (ΣMB = MC).

Vertical Summation & Social Marginal Benefit

View WTP Schedule (screen reader & keyboard accessible)

Willingness-to-Pay by Unit of Public Good
Unit #	Alice WTP	Bob WTP	Carol WTP	Social MB (Sum)	MC	Provide?