Scenario: Alexander and Vanessa Two Individuals, Alexander and Vanessa, Benefit

question 154

Multiple Choice

Scenario: Alexander and Vanessa Two individuals, Alexander and Vanessa, benefit from scientific research.Alexander's marginal private benefit from such research is given by the equation P = 200 - Q, where Q refers to the amount of research undertaken and P is the price Alexander is willing to pay for such research.Vanessa's marginal private benefit from such research is given by the equation P = 100 - Q.Suppose the marginal social cost of engaging in such research is constant at $100.
(Scenario: Alexander and Vanessa) Refer to the information in the scenario Alexander and Vanessa.If the socially optimal level of scientific research is produced and if both Vanessa and Alexander are truthful in disclosing the marginal private benefits they expect to receive from this research, what is the price per unit of research that Vanessa is willing to pay?

• A)$0
• B)$50
• C)$100
• D)$300

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