Question

g There are three types of people in the town of Santa Barbara: 13 type A, 25 type B, and 32 type C. Everyone in the town loves public gardens. Each type A person is willing to pay 3 per acre of garden, each type B is willing to pay 3, and each type C is willing to pay 6. The marginal cost of providing G acres of garden is 13G. What is the Pareto Efficient garden area?

Answer 1

Answer:

23.5 acres

Explanation:

Pareto Efficient garden area:

Marginal Cost = Marginal Benefit

     13G            = (13*3)+(25*3)+(32*6)

     13G            = 306

        G             = $\frac{306}{13}$

        G             = 23.5