Use the following to answer questions:
Figure: Traffic Lights in Plymouth
-(Figure: Traffic Lights in Plymouth) Look at the figure Traffic Lights in Plymouth. Plymouth has 1,000 residents. Each of the residents has the same individual marginal benefit per traffic light. If the town's population doubles and the new residents share the identical individual marginal benefit of the existing residents, the socially efficient quantity of traffic lights will:
A) stay the same.
B) fall.
C) rise.
D) fall to zero.

Question

Use the following to answer questions:
Figure: Traffic Lights in Plymouth 
-(Figure: Traffic Lights in Plymouth) Look at the figure Traffic Lights in Plymouth. Plymouth has 1,000 residents. Each of the residents has the same individual marginal benefit per traffic light. If the town's population doubles and the new residents share the identical individual marginal benefit of the existing residents, the socially efficient quantity of traffic lights will:
A) stay the same. 
B) fall. 
C) rise. 
D) fall to zero.

Quizplus · Accepted Answer

When the population doubles, the total marginal benefit from traffic lights increases because more people are benefiting from them, leading to a higher socially efficient quantity of traffic lights.

Use the Following to Answer Questions