Question
Guards patrolling the mall provide a service without rivalry: all the stores in the mall are simultaneously protected. The demand for the electronics store, which
Guards patrolling the mall provide a service without rivalry: all the stores in the mall are simultaneously protected. The demand for the electronics store, which suffer a big loss if thieves strike, is Q1 = 9 - 0.5P, where Q1 is demand of guards per hour, and P is the price of guard service. The ice-cream parlor, which loses less from a theft, demands fewer guards at any given price. Its demand is Q2 = 7 - P. A competitive market supplies as many guards as the stores want at $10.
What is the marginal benefit to society of guard service, given that a guard patrolling the mall protects both stores at once?
My friend says MB is 22 but I think 25. Please explain the answer!
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