part B 3.(a) Why does an 'external social cost' lead to inefficient overproduction?(b) The table below provides information about the marginal social cost and marginalsocial benefit of streetlights, which are a public good.Marginal socialbenefitMarginal socialQuantity(streetlights perblock)cost(dollars per year)(dollars per year)114421273101048.136.166419(i) What is the number of streetlights per block that a private company wouldprovide? Why?(ii) What is the efficient quantity?

Externalities is the spillover effects of an economic activities that have an impact on society's…

(a) Why does an 'external social cost' lead to inefficient overproduction? (b) The table below provides information about the marginal social cost and marginal social benefit of streetlights, which are a public good. Quantity (streetlights per block) Marginal social Marginal social benefit cost (dollars per year) (dollars per year) 1 14 4 2 12 7 3 10 10 4 8 13 6 16 4 19 (i) What is the number of streetlights per block that a private company would provide? Why? (ii) What is the efficient quantity?

(a) Why does an 'external social cost' lead to inefficient overproduction? (b) The table below provides information about the marginal social cost and marginal social benefit of streetlights, which are a public good. Quantity (streetlights per block) Marginal social Marginal social benefit cost (dollars per year) (dollars per year) 1 14 4 2 12 7 3 10 10 4 8 13 6 16 4 19 (i) What is the number of streetlights per block that a private company would provide? Why? (ii) What is the efficient quantity?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 6PA

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