Essay
(Table: Marginal Benefit of Fire Hydrants) Bob and Nancy live in a new housing development and they would like to have fire hydrants installed.The table Marginal Benefit of Fire Hydrants shows Bob's and Nancy's individual marginal benefits of different quantities of fire hydrants.Suppose that the marginal cost of installing a hydrant is $10.a) What is the most that Nancy would be willing to pay to have one hydrant installed in the neighborhood?
b) If Nancy had to pay for fire hydrants on her own, how many hydrants would there be?
c) What is the optimal number of fire hydrants in the neighborhood?
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