Use the Following to Answer Questions

question 38

Multiple Choice

Use the following to answer questions :
Figure: Market Failure
-(Figure: Market Failure) Use Figure: Market Failure.Suppose that the supply curve represents the marginal cost of providing streetlights in a neighbourhood where only two people,Ann and Joe,reside.The demand curve represents the marginal benefit that Ann receives from the streetlights.Suppose that Joe's marginal benefit from the streetlights is a constant amount equal to the vertical distance A-C.How much is Ann willing to pay for F streetlights?

• A) 0
• B) A
• C) B
• D) C