4. Suppose that 10 people live on a street and that each of them receives $2 in marginal benefit for each streetlight on their street, regardless of the number of streetlights provided. If the marginal cost of a street light is 2x, where x is the quantity of streetlights, what is the Pareto efficient number of streetlights to provide?
4. Suppose that 10 people live on a street and that each of them receives $2 in marginal benefit for each streetlight on their street, regardless of the number of streetlights provided. If the marginal cost of a street light is 2x, where x is the quantity of streetlights, what is the Pareto efficient number of streetlights to provide?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 6QR
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Suppose that 10 people live on a street and that each of them receives $2 in marginal benefit for each streetlight on their street, regardless of the number of streetlights provided. If the marginal cost of a street light is 2x, where x is the quantity of streetlights, what is the Pareto efficient number of streetlights to provide?
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