Figure 4.7
Willingness to pay for a Public Park

-Refer to Figure 4.7.If the marginal cost to provide the park is $3/hectare, __________.

Question

Figure 4.7
Willingness to pay for a Public Park
 
-Refer to Figure 4.7.If the marginal cost to provide the park is $3/hectare, __________.

Quizplus · Accepted Answer

The socially efficient size of the park is determined where the marginal cost equals the marginal benefit. If the marginal cost is $3/hectare, the efficient size is where the marginal benefit also equals $3, which is at 4 hectares according to the figure.

Figure 4.7 Willingness to Pay for a Public Park