Use the Following to Answer Question

question 195

Multiple Choice

Use the following to answer question:
Figure: Market Failure
-(Figure: Market Failure) Use Figure: Market Failure.Suppose that the supply curve represents the marginal cost of providing streetlights in a neighborhood where only two people,Ann and Joe,reside.The demand curve represents the marginal benefit that Ann receives from the streetlights.Suppose that Joe's marginal benefit from the streetlights is a constant amount equal to the vertical distance A-C.How much is Ann willing to pay for E streetlights?

• A)0
• B)A
• C)B