Table 11-2 Consider a Small Town with Only Three Families, the Greene

question 228

Multiple Choice

Table 11-2
Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family's willingness to pay for each streetlight.
-Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Greene's like the town to install?

• A)0 streetlights
• B)1 streetlight
• C)2 streetlights
• D)3 streetlights

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Definitions:

Core Values

Fundamental beliefs or principles that guide an organization's actions and decision-making processes.

Value-Based Management

A management approach that focuses on maximizing shareholder value through strategic decision making aligned with organizational goals.

Market Equilibrium Price

The price at which the quantity of goods demanded equals the quantity of goods supplied, leading to a stable market condition where there is no tendency for price to change.

Consumer Surplus

The variance between the amount consumers are ready to spend on a product or service and the amount they actually spend.