Question

please explain in depth why the answer is 2 acres in part b why cant the answer be 1 acres? i habe been looking up other solutions on this question and i dont get it

3. Consider the town of Springfield with only three residents, Sophia, Amber, and Cedr residents are trying to determine how large, in acres, they should build the public park. The table below shows each resident's willingness to pay for each acre of the park. Acres Cedric WTP (S) Sophia WTP ($) 10 Amber WTP ($) lowa -NWU a. Suppose the cost to build the park is $24 per acre. How many acres should the park be to maximize total surplus from the park in Springfield? b. Suppose the cost to build the park is $24 per acre and that the residents have agreed to split the cost of building the park equally. If the residents vote to determine the size of park to build, basing their decision solely on their own willingness to pay and trying to maximize their own surplus), what is the largest park size for which the majority of residents would vote "yes?"

Answer 1

Solution: (3) (a) Suppose cost to build the park is $24 per acre, then no of acres should the park be maximize total surplus from the park in spring field is: - The cost to build the park = 824 peracre and The park should be maximised total surplus from producing @ acre of pork because each residence is Willing to contribute to build the park cost is $24, $6 +$ 14+$4 . So, from each contribution Total cost = = $24 8. Hence te of production equals at 3 acres. (6) It cost of building park is 824 per acre and agreed to split the cost, the largest park size for which the majority of residents would vote is;

→ Size of park if cost is $24 18; The cost of the build the park is $24 per acre and residences have to agree to split cost of building the Park equally, the largest park size is 2 acres. (c) cost = 824 per acre Split equally between 3 persons so each will bear = 88 per acre • The willing help to pay of credia for one acre of public Park 18 = $8 • Since, this is the lower than the cost, cedric will not vote for public park at all. • sophia will vote for a acres of public parks of her maximum willingness to pay equale cost corresponding to a acres. Amber would want y acres of public park as her

maximum willingness to pay equals the cost corresponding to yaches • However, as at a acres, herwillingness to pay is still greater than cost, she will vote with sophia for a acres This largest park size is a acres x =