The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
The residents of Towneburg would be willing to pay a total of _____ for the first unit of fireworks and the total cost of providing that first unit is _______.

Question

The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below: 
The residents of Towneburg would be willing to pay a total of _____ for the first unit of fireworks and the total cost of providing that first unit is _______.

Quizplus · Accepted Answer

To find the total amount that the residents of Towneburg are willing to pay for the first unit of fireworks, we can simply plug in 1 for the "units" variable in the demand equation:

P = 50 - 2 * 1
P = 48

Therefore, the residents of Towneburg are willing to pay a total of $48 for the first unit of fireworks.

To find the total cost of providing that first unit, we can simply plug in 1 for the "units" variable in the cost equation:

Cost = $1,000 + $10 * 1
Cost = $1,010

Therefore, the total cost of providing the first unit of fireworks is $1,010.

Since the residents are willing to pay more for the first unit of fireworks than the actual cost of providing it, hosting the fireworks show would be profitable. Of the given options, the best choice is D.

The 20 Residents of the Village of Towneburg Are Considering