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There are two consumers of mosquito abatement, a public good. Dash's benefit from mosquito abatement is given by = 100 , where is the quantity
There are two consumers of mosquito abatement, a public good. Dash's benefit from mosquito abatement is given by = 100 , where is the quantity of mosquito abatement. Lilly's benefit is given by = 60 .
- Calculate the marginal social benefit
- Suppose that mosquito abatement can be provided at a marginal cost of = 2. Find the optimal level of mosquito abatement. (And use the respective graphs to show all your results.)
- What is the market price of offering the optimal level in (b) (the MC at the optimal quantity)? Are any of Dash or Lilly willing to buy the optimal quantity on their own?
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