We propose and demonstrate a cost-effective C-band 50-Gb/s downstream 4-ary pulse amplitude modulation passive optical network system implementable by using a 2-bit digital-to-analog converter and a linear electrical equalizer. The waveform distortions induced by band-limitation of opto-electronic devices and fiber chromatic dispersion are compensated by using an electrical and optical pre-equalizers realized by a high-pass filter (HPF) and a dispersion-compensation module (DCM), respectively. To facilitate easy operation and management of the system, the amounts of pre-equalization are all fixed regardless of transmission distance up to 20 km. At the receiver, a linear feed-forward equalizer is employed to compensate for the remaining waveform distortions adaptively to transmission distance. Also, a semiconductor optical amplifier (SOA) is used as an optical pre-amplifier to increase the power budget. We determine the system parameters through experiment to maximize the power budget of the system. The experimental results show that the proposed system is capable of securing the power budget of 29.2 dB.