Find the marginal social benefit of building

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Reference no: EM13742043

There are 2 fishermen, Zach and Jacob, who fish along a certain coast. Both would benefit if lighthouses were built along the coast where they fish. The marginal cost of building each additional lighthouse is $25. The demand curves for lighthouses are: Zach: P = 10 – .1Q Jacob: P = 20 - .1Q

Find the marginal social benefit of building 20 lighthouses and explain why it’s not the efficient level.

Sketch the results to part c (demand curves, MC curve, efficient level, etc.)

Reference no: EM13742043

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