Use the following to answer questions : $\begin{array}{l}
\begin{array}{lcc}
\hline\text { Quantity of } & \text { Dave's } & \text { Art's } \
\text { Streetlights in the } & \text { Individual } & \text { Individual } \
\text { Neighbourhood } & \text { Marginal Benefit } & \text { Marginal Benefit }\
\hline0&&\
1&\$ 15 & \$ 20 \
2&10 & 15 \
3&5 & 10 \
4&2 & 3\
\hline
\end{array}\
\end{array}$

-(Table: Marginal Benefit from Additional Streetlights)Use Table: Marginal Benefit from Additional Streetlights.Suppose that the marginal cost of installing a streetlight is $6.What is the socially optimal number of streetlights in the neighbourhood?
A) 1
B) 2
C) 3
D) 4

Question

Use the following to answer questions : $\begin{array}{l}
\begin{array}{lcc}
\hline\text { Quantity of } & \text { Dave's } & \text { Art's } \
\text { Streetlights in the } & \text { Individual } & \text { Individual } \
\text { Neighbourhood } & \text { Marginal Benefit } & \text { Marginal Benefit }\
\hline0&&\
1&\$ 15 & \$ 20 \
2&10 & 15 \
3&5 & 10 \
4&2 & 3\
\hline 
\end{array}\
\end{array}$

-(Table: Marginal Benefit from Additional Streetlights)Use Table: Marginal Benefit from Additional Streetlights.Suppose that the marginal cost of installing a streetlight is $6.What is the socially optimal number of streetlights in the neighbourhood?
A) 1
B) 2
C) 3
D) 4

Quizplus · Accepted Answer

The socially optimal number of streetlights is where the total marginal benefit equals the marginal cost. At 3 streetlights, the combined marginal benefit for Dave and Art is $15 ($5 + $10), which is greater than the marginal cost of $6. At 4 streetlights, the combined marginal benefit is $5 ($2 + $3), which is less than the marginal cost.

Use the Following to Answer Questions -(Table: Marginal Benefit from Additional Streetlights)Use Table: Marginal Benefit from of }