There are two consumers of mosquito abatement (a public good), Dave and Lilly. Dave's benefit from mosquito abatement is given by MBD = 100 – Q, where Q is the quantity of mosquito abatement. Lilly's benefit is given by MBL= 60 – Q. a Calculate the total marginal benefit, MBT. b. Suppose that mosquito abatement can be provided at a marginal cost of MC = 2Q. Find the socially optimal level of abatement. c. If mosquito abatement is privately supplied, what quantity will be supplied by Dave, and what quantity will be supplied by Lilly? Briefly explain.
There are two consumers of mosquito abatement (a public good), Dave and Lilly. Dave's benefit from mosquito abatement is given by MBD = 100 – Q, where Q is the quantity of mosquito abatement. Lilly's benefit is given by MBL= 60 – Q. a Calculate the total marginal benefit, MBT. b. Suppose that mosquito abatement can be provided at a marginal cost of MC = 2Q. Find the socially optimal level of abatement. c. If mosquito abatement is privately supplied, what quantity will be supplied by Dave, and what quantity will be supplied by Lilly? Briefly explain.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
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Problem 12SCQ: Consider the case of global environmental problems that spill across international borders as a...
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There are two consumers of mosquito abatement (a public good), Dave and Lilly. Dave’s benefit from mosquito abatement is given by ??? = 100 − ?, where Q is the quantity of mosquito abatement. Lilly’s benefit is given by ??? = 60 − ?.
a. Calculate the total marginal benefit, ???.
b. Suppose that mosquito abatement can be provided at a marginal cost of ?? = 2?. Find the socially optimal level of abatement.
c. If mosquito abatement is privately supplied, what quantity will be supplied by Dave, and what quantity will be supplied by Lilly? Briefly explain.
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