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Gated communities consist of a several residential properties surrounded by high walls or fences, often with security guards employed to ensure that only residents can access the site. All residents enjoy the full benefits of feeling secure, and no resident can be excluded. Suppose that there are two families in a particular gated community. Their willingness to pay for each additional security guard (S) is given by: WTP₁ = 10 - S WTP220 S If the marginal cost is MC = S/4, what is the socially optimal provision of security guards? a. 8 security guards. 13.33 security guards. c. 16 security guards. d. 25 security guards. Gated communities consist of a several residential properties surrounded by high walls or fences, often with security guards employed to ensure that only residents can access the site. All residents enjoy the full benefits of feeling secure, and no resident can be excluded. Suppose that there are two families in a particular gated community. Their willingness to pay for each additional security guard (S) is given by: WTP₁ = 10 - S WTP220 S If the marginal cost is MC = S/4, what is the socially optimal provision of security guards? a. 8 security guards. 13.33 security guards. c. 16 security guards. d. 25 security guards.
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Related Book For
Accounting Information Systems
ISBN: 9780132871938
11th Edition
Authors: George H. Bodnar, William S. Hopwood
Posted Date:
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