Matthew drives a truck for Overtheroad Haulers. Matthew's marginal benefit for driving per day is: MB(m) = 2,400 - 2m, where m is the number of miles driven. The marginal social cost per mile is MSC(m) = 2m. Calculate the efficient number of miles driven for Matthew in a day. Since Overtheroad Haulers has full insurance on Matthew's truck, Matthew's personal marginal cost is: MPC(m) = m. How many miles per day will Matthew drive? Would it be efficient for society if Overtheroad Haulers places a limit on the number of miles Matthew drives? If so, what limit should they set?

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The Answer of Matthew drives a truck for Overtheroad Haulers. Matthew's marginal benefit for driving per day is: MB(m) = 2,400 - 2m, where m is the number of miles driven. The marginal social cost per mile is MSC(m) = 2m. Calculate the efficient number of miles driven for Matthew in a day. Since Overtheroad Haulers has full insurance on Matthew's truck, Matthew's personal marginal cost is: MPC(m) = m. How many miles per day will Matthew drive? Would it be efficient for society if Overtheroad Haulers places a limit on the number of miles Matthew drives? If so, what limit should they set?

Matthew Drives a Truck for Overtheroad Haulers