-Attractive landscaping increases the property values of surrounding homes, creating a marginal benefit. The figure above represents the market for monthly landscaping contracts.
a) What is the marginal social benefit of the 40th contract? Of the 60th contract?
b) What is the marginal private benefit of the 40th contract?
c) What is the marginal external benefit of the 40th contract?
d) What is the unregulated competitive equilibrium price and quantity?
e) What is the efficient quantity?
f) What is the amount of the deadweight loss?
Definitions:
Discrete Quantitative Variables
Variables that represent countable quantities and can take on a finite number of distinct values.
Elementary Units
The simplest, indivisible entities which a data set or a statistical analysis is concerned with.
Finite Result
An outcome or solution that is fixed and definitive, with limitations in terms of size, number, or extent.
Discrete Variable
A variable that can take on a countable number of distinct values and cannot take on every value within its range.
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