Determining social efficient level of snowploughing services

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Q1) Follow the directions. Sketch graphs where asked and ilustrate your work. Be sure your answers to questions are “on point” and “robust.”

Q2) Thelma and Louise are neighbours. Thelma’s marginal benefit from snowploughing services is 12-Z, where Z is number of the times, street is ploughed. Louise’s marginal benefit is 8-2Z. Marginal cost of getting street ploughed is $16.

Determine social efficient level of provision for snowploughing services. Write down 3 possible methods in which they can share costs of snow ploughing at social efficient level and how much would each person pay under these 3 methods? Suppose Thelma makes $90,000 per year and Louise $10,000 per year.

Reference no: EM1310598

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