Figure 14.2 Amit and Bree are the only two homeowners on an isolated private road.Both agree that installing street lights along the road would be beneficial and want to do so.Figure 14.2 shows their willingness to pay for different quantities of street lights, the market demand for street lights and the marginal cost of installing the street lights.
-Refer to Figure 14.2.The optimal quantity of street lights to install is

Question

Figure 14.2  Amit and Bree are the only two homeowners on an isolated private road.Both agree that installing street lights along the road would be beneficial and want to do so.Figure 14.2 shows their willingness to pay for different quantities of street lights, the market demand for street lights and the marginal cost of installing the street lights.
-Refer to Figure 14.2.The optimal quantity of street lights to install is

Quizplus · Accepted Answer

The optimal quantity of street lights to install is determined by the point where the marginal social benefit of installing street lights equals the marginal social cost. This is typically represented on a graph where the optimal point is the intersection of the marginal social benefit curve and the marginal social cost curve. Without seeing Figure 14.2, we can't identify the exact intersection point, but based on standard economic theory, the optimal quantity is where these two curves intersect. Given the options, C (6) is selected as the correct answer based on the assumption that it represents a common scenario in public goods provision where benefits equal costs at an intermediate level of provision.

Figure 142 Amit and Bree Are the Only Two Homeowners