-Smallville has decided to provide lawn cutting services for an $8 fee. Demand for lawn cutting services by Smallville's three resident groups are represented in Exhibit N-2. What is the economically efficient level of lawn cutting services toprovide?

Question

Quizplus · Accepted Answer

The economically efficient level of lawn cutting services is where the marginal cost equals the marginal benefit. Assuming Exhibit N-2 shows demand curves, 22 units is likely where the fee of $8 intersects the aggregate demand curve, indicating the efficient quantity.

-Smallville Has Decided to Provide Lawn Cutting Services for an $8