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Question 107

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Use the following to answer questions :
Figure: Market Failure Use the following to answer questions : Figure: Market Failure -(Figure: Market Failure) Use Figure: Market Failure.Suppose that the supply curve represents the marginal cost of providing streetlights in a neighbourhood where only two people,Ann and Joe,reside.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 the vertical distance A-C.How much is Ann willing to pay for G streetlights? A) 0 B) A C) B D) C
-(Figure: Market Failure) Use Figure: Market Failure.Suppose that the supply curve represents the marginal cost of providing streetlights in a neighbourhood where only two people,Ann and Joe,reside.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 the vertical distance A-C.How much is Ann willing to pay for G streetlights?


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

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