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Suppose in a community 10 people each have a Marginal Benefit from streetlights equal to MB=5-2Q, and five people each have a Marginal Benefit for
Suppose in a community 10 people each have a Marginal Benefit from streetlights equal to MB=5-2Q, and five people each have a Marginal Benefit for streetlights of MB=7-Q, where Q is the quantity of streetlights. The marginal cost of a streetlight is MC=3.
a. Sketch the MSB curve for the society.
b. What is the socially optimal number of streetlights (it's OK here to have a fractional number of streetlights).
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