There is an issue of how much of a public good- a river- should be protected...
There is an issue of how much of a public good- a river- should be protected from further development. There needs to be a recommendation based upon the following information. Every year, 1,000 people benefit from the river, specially for its recreational purposes.A survey estimates that each beneficiary has the same demand function for river preservation: q = 40 - (0.4)(P)- where P is the price per mile which persons are willing to pay every year for q miles of river preserved. The marginal opportunity cost of preservation is $25,000/mile/year.
a. How many miles of river would be preserved in an efficient allocation?
b. What is the magnitude of the total annual benefits associated with this policy?
c. What are the total annual costs of this policy?
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There is an issue of how much of a public good- a river- should
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Thank you in advance! Suppose the state is trying to decide how many miles of a...
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Thank you in advance!
Suppose the state is trying to decide how many miles of a very scenic river it should preserve. There are 100 people in the community, each of whom has an identical inverse demand function given by P - 10 1.0q, where q is the number of miles preserved and P is the per- mile price he or she is willing to pay for q miles of preserved river. 1. (a) If the marginal cost of preservation...
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