Table 11-1
Consider the town of Tritown with only three residents,Ed,Jim,and Tony.The three residents are trying to determine how large,in acres,they should build the public park.The table below shows each resident's willingness to pay for each acre of the park.

-Refer to Table 11-1.Suppose the cost to build the park is $14 per acres.How large should the park be to maximize total surplus from the park in Tritown?
A) 2 acres
B) 3 acres
C) 4 acres
D) 5 acres

Question

Table 11-1
Consider the town of Tritown with only three residents,Ed,Jim,and Tony.The three residents are trying to determine how large,in acres,they should build the public park.The table below shows each resident's willingness to pay for each acre of the park.
 
-Refer to Table 11-1.Suppose the cost to build the park is $14 per acres.How large should the park be to maximize total surplus from the park in Tritown?
A) 2 acres 
B) 3 acres 
C) 4 acres 
D) 5 acres

Quizplus · Accepted Answer

To maximize total surplus, the park should be built up to the point where the marginal benefit equals the marginal cost. If the cost is $14 per acre, the park should be 4 acres, assuming the marginal benefit at 4 acres is equal to or greater than $14 and less than $14 at 5 acres.

Table 11-1 Consider the Town of Tritown with Only Three Residents,Ed,Jim,and Tony.The