The town of Sointenly does not have any public snow-plows.Anyone who wants his street cleared of snow must hire a private snow-plow company,which charges $75 per street.Curly,Larry and Moe all live on a dead-end street;Curly lives at the very end.Each one values snow removal at $50.At present,the snow is never cleared from the street.We can conclude that
A)there is no way to improve upon the current situation because the cost of snow removal exceeds what each individual is willing to pay for it.
B)Larry and Moe should wait for Curly to pay for the service because Curly will pay to have the snow cleared all the way to his house.Then Larry and Moe will get the service for free.
C)the fee charged by the snow removal company is unfairly high.
D)Curly, Larry and Moe could all be better off if they acted collectively.

Question

Quizplus · Accepted Answer

If Curly, Larry, and Moe acted collectively, they could share the cost of hiring the private snow plow company, and each person would pay less than $75. For example, if the three of them split the cost evenly, they would each pay $25, which is less than their individual valuation of $50. This means that they would all be better off if they worked together to pay for snow removal. Therefore, the best choice is D.

The Town of Sointenly Does Not Have Any Public Snow-Plows