Britney and Paris are neighbors. During the winter, it is impossible for a snowp
ID: 1191648 • Letter: B
Question
Britney and Paris are neighbors. During the winter, it is impossible for a snowplow to clear the street in front of Britney’s house without clearing the front of Paris’s. Britney’s marginal benefit from snowplowing services is 12 , where the number of times the street is plowed. Paris’s marginal benefit is 8 2. The marginal cost of getting the street plowed is $16.
Sketch the two marginal benefit schedules and the aggregate marginal benefit schedule. Draw in the marginal cost schedule, and find the efficient level of provision for snowplowing services.
Britney and Paris are neighbors. During the winter, it is impossible for a snowplow to clear the street in front of Britney’s house without clearing the front of Paris’s. Britney’s marginal benefit from snowplowing services is 12 , where the number of times the street is plowed. Paris’s marginal benefit is 8 2. The marginal cost of getting the street plowed is $16.
Sketch the two marginal benefit schedules and the aggregate marginal benefit schedule. Draw in the marginal cost schedule, and find the efficient level of provision for snowplowing services. Britney and Paris are neighbors. During the winter, it is impossible for a snowplow to clear the street in front of Britney’s house without clearing the front of Paris’s. Britney’s marginal benefit from snowplowing services is 12 , where the number of times the street is plowed. Paris’s marginal benefit is 8 2. The marginal cost of getting the street plowed is $16.
Sketch the two marginal benefit schedules and the aggregate marginal benefit schedule. Draw in the marginal cost schedule, and find the efficient level of provision for snowplowing services.
Explanation / Answer
Marginal Benefit for Britney Marginal Benefit for Paris Aggregate Marginal Benefit Maginal Cost
12 82 94 16
12 82 94 16
12 82 94 16
12 82 94 16
12 82 94 16
therefore, at all levels it is beneficial to go for street plowing if aggregate benefit is considered or if Paris bears the cost. but if cost is to be borne by Britney, it is giving her a loss fo $4 for each street plowing.
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