Question
Bob and Will use city's backyard waste removal service. Bob's marginal benefit from the service is 12 - Q, and Will's is 8 - 2Q,
Bob and Will use city's backyard waste removal service. Bob's marginal benefit from the service
is 12 - Q, and Will's is 8 - 2Q, where Q is the number of times the waste is removed. The
marginal cost of removing the backyard waste to the city is $16.
a. Solve mathematically for social marginal benefit curve and show on a graph individual
and social marginal benefits curves and the marginal cost curve.
b. How the Social marginal benefit would be different if the waste removal service was a
private good?
c. Solve the problem to find the optimal provision for the waste removal service and show
in on the graph.
d. What is the net benefit to Bob and Will if the efficient number were provided?
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