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Suppose Anna likes fireworks.Hermarginal benefit from setting offfireworks isgiven by(Q is number of fireworks): MB a =70- Q She needs to buy the fireworks from
Suppose Anna likes fireworks.Hermarginal benefit from setting offfireworks isgiven by(Q is number of fireworks):
MBa=70- Q
She needs to buy the fireworks from Indiana.She needs to drive there and pay for the fireworks.Thus her marginal cost is:
MCa=10+Q
Bob wants to have a quiet evening after a long day at work.Anna's fireworks generate a marginal cost to him of:
MCb=10+3Q
What isthe market outcome?In other words,how many fireworks will Anna set off if she only takes her own costs and benefits into account?
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