What is the social marginal benefit curve

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Suppose that Alyssa and Karima live on the same street. In the winter, both of them like the snow on their street to be plowed. Alyssa’s demand is given by Q = 60 – 2P and Karima’s demand is given by Q = 40 – 4P. Suppose that the marginal cost of plowing the snow is constant at $34. a. What is the social marginal benefit curve? b. What is the socially efficient amount of plowing that should be done? c. What is the socially efficient amount of plowing that should be done if the marginal cost of plowing were $6? d. Do you think the amount of plowing done on this street would be socially efficient? Why?

Reference no: EM131246225

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