Essay
-Attractive landscaping increases the property values of surrounding homes, creating a marginal benefit. The figure above represents the market for monthly landscaping contracts.
a) What is the marginal social benefit of the 40th contract? Of the 60th contract?
b) What is the marginal private benefit of the 40th contract?
c) What is the marginal external benefit of the 40th contract?
d) What is the unregulated competitive equilibrium price and quantity?
e) What is the efficient quantity?
f) What is the amount of the deadweight loss?
Correct Answer:
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a) The marginal social benefit of the 40...
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