The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | c | c | }
\hline \text { Voter } & \text { Marginal Benefit } \
\hline \text { Kyle } & \$ 420 \
\hline \text { Dylan } & \$ 360 \
\hline \text { Fran } & \$ 350 \
\hline \text { Ronnie } & \$ 190 \
\hline \text { Sam } & \$ 170 \
\hline
\end{array}$$ Dylan proposes that the city let a private company build the pool and charge residents a one-time fee to use the pool as much as they like. Only residents who pay the fee would be allowed to use the pool. If the private company were allowed to set a single fee, then:

Question

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | c | c | } 
\hline \text { Voter } & \text { Marginal Benefit } \
\hline \text { Kyle } & \$ 420 \
\hline \text { Dylan } & \$ 360 \
\hline \text { Fran } & \$ 350 \
\hline \text { Ronnie } & \$ 190 \
\hline \text { Sam } & \$ 170 \
\hline
\end{array}$$ Dylan proposes that the city let a private company build the pool and charge residents a one-time fee to use the pool as much as they like. Only residents who pay the fee would be allowed to use the pool. If the private company were allowed to set a single fee, then:

Quizplus · Accepted Answer

The total marginal benefit from all residents is $1,490, which is more than the cost of the pool ($1,000). However, a private company setting a single fee would need to ensure enough residents pay to cover the cost. The highest fee that would ensure at least two residents pay (Kyle and Dylan) is $360, totaling $720, which is less than the cost. Therefore, no private company would offer to build the pool.

The Small City of Pleasantville Is Considering Building a Public