There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Collectively, the residents of Towneburg would be willing to pay ______ for the 24th shell, and the marginal cost of the 24^th shell is ______.

Question

Quizplus · Accepted Answer

To find the willingness to pay for the 24th shell, we need to calculate the total willingness to pay for all shells up to the 24th one. We can use the following table to do so:

Shell   | Quantity | Willingness to Pay | Total Willingness to Pay
------  | -------- | ----------------- | ------------------------
1       | 20       | $80               | $80
2       | 19       | $76               | $156
3       | 18       | $72               | $228
...     | ...      | ...               | ...
23      | 1        | $4                | $986
24      | 0        | $0                | $986

Thus, the residents of Towneburg would be willing to pay $40 for the 24th shell.

To find the marginal cost of the 24th shell, we need to calculate the additional cost of adding one more shell to the display. Since the cost of the display is $10 per shell, the marginal cost of the 24th shell is $10.

Therefore, the best choice is D.

There Are 20 Residents in the Village of Towneburg