Three different voters demand curves for a public park are shown on the graphs below.

Suppose a wealthy citizen donates 2 acres of land to the city and land costs $20 per acre.The optimal park size is

Question

Three different voters demand curves for a public park are shown on the graphs below.

Suppose a wealthy citizen donates 2 acres of land to the city and land costs $20 per acre.The optimal park size is

Quizplus · Accepted Answer

To determine the optimal park size, we need to find the point where the marginal benefit of the park is equal to the marginal cost of building and maintaining it.

For voter 1, the marginal benefit of the park starts decreasing after 2 acres, so their demand curve is not helpful in determining the optimal park size.

For voter 2, the marginal benefit of the park starts decreasing after 4 acres. At that point, the marginal benefit is equal to the marginal cost (which is $20 per acre) so the optimal park size for this voter is 4 acres.

For voter 3, the marginal benefit of the park starts decreasing after 6 acres. However, this voter is not willing to pay more than $20 for any amount of park land, so their demand curve is not helpful in determining the optimal park size.

Since the optimal park size needs to meet the needs of all three voters, we can conclude that the optimal park size is 4 acres.

Three Different Voters Demand Curves for a Public Park Are