The Samuelson Condition refers to a criterion in public economics that determines the efficient provision of public goods. It states that a public good should be provided up to the point where the sum of the marginal rates of substitution of all individuals equals the marginal cost of providing that good. Mathematically, this can be expressed as:
where is the utility of individual , is the quantity of the public good, and is the marginal cost of providing the good. This means that the total benefit derived from the last unit of the public good should equal its cost, ensuring that resources are allocated efficiently. The condition highlights the importance of collective willingness to pay for public goods, as the sum of individual benefits must reflect the societal value of the good.
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