Figure: Market Failure (Figure: Market Failure) Look at the Figure Market Failure.Suppose the Market

question 195

Multiple Choice

Figure: Market Failure
(Figure: Market Failure) Look at the figure Market Failure.Suppose the supply curve represents the marginal cost of providing street lights in a neighborhood that is composed of two people, Ann and Joe.The demand curve represents the marginal benefit that Ann receives from the street lights.Suppose that Joe's marginal benefit from the street lights is a constant amount equal to AC.How much is Ann willing to pay for G street lights?

• A)0
• B)A
• C)B
• D)C