The Table Contains Data on the Marginal Cost and Willingness-To-Pay

question 154

Essay

The table contains data on the marginal cost and willingness-to-pay of individuals A and B for acres of public parkland next to their town. What is the total demand for parkland and what is the socially optimal amount of land that should be set aside? Use a graph to support your response.
$\begin{array}{|r|c|c|c|c|}\hline {D_{A}} & &{D_{s}} & \\\hline \text { Quantity } & \begin{array}{c}\text { A's } \\\text { Willingness- } \\\text { to-Pay }\end{array} & \text { Quantity } & \begin{array}{c}\text { B's Willingness- } \\\text { to-Pay }\end{array} & \text { Marginal Cost } \\\hline 0 & \$ 40 & 0 & \$ 30 & - \\\hline 100 & \$ 30 & 100 & \$ 15 & \$ 10 \\\hline 200 & \$ 20 & 200 & \$ 0 & \$ 20 \\\hline 300 & \$ 10 & 300 & \$ 0 & \$ 40 \\\hline 400 & 50 & 400 & \$ 0 & \$ 70 \\\hline\end{array}$

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Definitions:

Cash Receipts

The collection of money, including cash, checks, and credit card payments, received by a business during a period.

Minimum Cash Balance

The lowest amount of cash that a company or individual aims to hold in order to meet operational and transaction needs.

Net Operating Income

The profit generated from a business's core operations, excluding expenses and revenues from non-operating activities.

Estimated

Refers to approximate calculations or judgments about figures or values that are not precisely known.