The tables below show the marginal benefits from public tele

The tables below show the marginal benefits from public television broadcasts for the only two people in town who watch it. Television broadcasts are a public good. Bob Smith Sue Johnston Marginal Benefit Quantity Dlas per hour) Marginal Benefit QuantityDs per houx) 25 20 15 10 50 40 30 20 10

Solution

1. 3 hours

This is because Sue Johnston receives marginal benefit of greater than $ 27 for 3 hours.

2. 0 hour

Because Bob receives marginal benefit of $ 25 for 1 hour while cost that he has to pay for it is $ 27. So, Bob will not buy any hour of television.

3. 3 hours

Till 3 hours, Sue\'s marginal benefit exceeds the marginal cost.

4. Inefficient

Because broadcasting costs same for firm whether it is provided to 1 person or 1000 so if person has to buy it then it becomes less efficient.