• Suppose there are 10,000 people in constituency and each is willing to pay $. 10 for each extra well dug regardless of the number of wells dug. If the cost of digging a well is given by C = Q2 + 20Q. Where C is cost and Q is the number of wells. 
• Required 
• a. Calculate the Pareto efficiency number of wells to be dug
• b. If the government was to dig the wells at a minimal cost, how many wells will it dig and how much will it spend? 
• c. Suppose the contract of digging wells was to be undertaken by a private organization that is profit oriented and to be financed by a donor, calculate the number of wells that the private firm will dig and the total cost

Answer rating: 100% (QA)

Solution a tc q 2 20q mc dcdq 2q 20 p mc ... View the full answer