Suppose that a community has ten residents, each of whom decide how many trees to plant.

The marginal cost of planting a tree is a constant $3. The benefit from N number of trees in the

community is $30 to each resident.

What is the efficient number of trees to be planted? How many trees will be planted in the

market outcome? If you are one of the then resident, and you have heard that each of the

other residents will plant 2 trees, how many trees will you plant? How about if each of the

other residents plants 3 trees?