Guards patrolling a mall protect the malls two stores. The electronics stores demand curve for guards is

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Guards patrolling a mall protect the mall’s two stores. The electronics store’s demand curve for guards is greater at all prices than that of the icecream parlor. The marginal cost of a guard is $10 per hour. Use a diagram to show the equilibrium, and compare that to the socially optimal equilibrium. Now suppose that the mall’s owner will provide a subsidy of s per-hour-per-guard. Show in your graph the optimal s that leads to the socially optimal outcome for the two stores.

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Strategic Management For Hospitality And Tourism

ISBN: 9780750665223

1st Edition

Authors: Fevzi Okumus Levent Altinay Prakash Chathoth

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