The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
Suppose that the units of the fireworks display are measured not by the number of units of fireworks but by the number of people who watch them.Assume that Towneburg roads are never congested and that the display will be shown over a large body of water.If that is the case

Question

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below: 
Suppose that the units of the fireworks display are measured not by the number of units of fireworks but by the number of people who watch them.Assume that Towneburg roads are never congested and that the display will be shown over a large body of water.If that is the case

Quizplus · Accepted Answer

If the display will be shown over a large body of water and the units are measured by the number of people who watch, there will be no marginal cost for adding additional viewers since the cost is fixed and not dependent on the number of viewers. This means everyone can enjoy the display without any additional cost, making it more likely that there will be free riders.

The 20 Residents of the Village of Towneburg Are Considering