The city of Econoville has 100 residents who each have the identical demand function for park area: P = 10 - Q. The marginal cost of providing parks is MC(Q) = 10 + 10Q. Park area is a public good. That is, if the city of Econoville provides park area, all of the residents can enjoy the area. If the city of Econoville does not offer public park area, how much area of parks will each individual resident maintain on their own? What is the optimal level of public parks in Econoville?

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The Answer of The city of Econoville has 100 residents who each have the identical demand function for park area: P = 10 - Q. The marginal cost of providing parks is MC(Q) = 10 + 10Q. Park area is a public good. That is, if the city of Econoville provides park area, all of the residents can enjoy the area. If the city of Econoville does not offer public park area, how much area of parks will each individual resident maintain on their own? What is the optimal level of public parks in Econoville?

The City of Econoville Has 100 Residents Who Each Have