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Question 5 Suppose that there are a large number of identical agents. The dollar value of the benefits that each agent would receive from membership
Question 5 Suppose that there are a large number of identical agents. The dollar value of the benefits that each agent would receive from membership in a congestible club is B - s [20m - m2 + 225] where s is the size of the club and m is the number of agents belonging to the club. Now suppose that the cost per member is C=7- S m where y is a parameter. Show that the optimal size of the club falls as y rises, but that the optimal membership remains constant. Find the optimal size of the club when y is 1000
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