In a scenario where a city must decide between building a new park or a new library, the marginal cost of the park is \$500,000 and the marginal benefit is \$600,000, while the library's marginal cost is \$400,000 and the marginal benefit is \$350,000. Which project should the city choose based on allocative efficiency?

• A. The library, because its marginal cost is lower.
• B. Neither, because both have positive marginal costs.
• C. The park, because its marginal benefit exceeds its marginal cost.
• D. Both, because they both provide benefits.

Answer: (C)