Matthew drives a truck for Overtheroad Haulers. Matthew's marginal benefit for driving per day is: where m is the number of miles driven. The marginal social cost per mile is 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: 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?

Question

Matthew drives a truck for Overtheroad Haulers. Matthew's marginal benefit for driving per day is:  where m is the number of miles driven. The marginal social cost per mile is  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:  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:  where m is the number of miles driven. The marginal social cost per mile is  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:  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