Consider the provision of a playground. The marginal benefit for consumer 1 is given by MB = 30 – 2qand the marginal benefit for consumer 2 is given by MB = 20 – ½ q. If the marginal cost of %3D provision is $5per unit, what is the socially optimal level of the playground?

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter13: Positive Externalities And Public Goods
Section: Chapter Questions
Problem 24P: Assume that the marginal private costs of a film producing fuel-efficient can; is greater than the...
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Consider the provision of a playground. The
marginal benefit for consumer 1 is given by MB =
30 – 2qand the marginal benefit for consumer 2 is
given by MB = 20 – ½ q. If the marginal cost of
provision is $5per unit, what is the socially optimal
level of the playground?
*a. 30 units
b.18 units
c.0 units
d.10 units
e.None of the other answers is correct.
Transcribed Image Text:Consider the provision of a playground. The marginal benefit for consumer 1 is given by MB = 30 – 2qand the marginal benefit for consumer 2 is given by MB = 20 – ½ q. If the marginal cost of provision is $5per unit, what is the socially optimal level of the playground? *a. 30 units b.18 units c.0 units d.10 units e.None of the other answers is correct.
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