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Question 104

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Figure: Market Failure Use the following to answer questions: Figure: Market Failure -(Figure: Market Failure) Look at the figure Market Failure. Suppose the supply curve represents the marginal cost of providing streetlights in a neighborhood that is composed of two people, Ann and Joe. The demand curve represents the marginal benefit that Ann receives from the streetlights. Suppose that Joe's marginal benefit from the streetlights is a constant amount equal to AC. How much is Ann willing to pay for F streetlights? A) 0 B) A C) B D) C
-(Figure: Market Failure) Look at the figure Market Failure. Suppose the supply curve represents the marginal cost of providing streetlights in a neighborhood that is composed of two people, Ann and Joe. The demand curve represents the marginal benefit that Ann receives from the streetlights. Suppose that Joe's marginal benefit from the streetlights is a constant amount equal to AC. How much is Ann willing to pay for F streetlights?


A) 0
B) A
C) B
D) C

Correct Answer:

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