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

Adding 2 acres of land to the public park increases the marginal benefit of the park for each voter, as shown by the upward shift of the demand curves. The total cost of the park is given by the cost of the additional 2 acres plus the cost of maintaining the park. Since the cost of 2 acres is $40 ($20 per acre), the optimal park size is the one that maximizes the net benefit, which is the sum of the marginal benefits of each voter minus the total cost. From the graphs, it is clear that the net benefit is maximized at a park size of 4 acres. Therefore, the best choice is B.

Three Different Voters Demand Curves for a Public Park Are