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Consider two Cubans, Jose and Sara. They each enjoy parks but to a different degree. MWTPJOSE = 9-2Q, while MWTPSARA = 6-Q. The MC of park provision is MC = 3+Q. Find the socially efficient number of parks, and the equilibrium cost per park (of park-provision).
Consider that the regulator approaches Jose and Sara and asks each to contribute half that cost (as in marginal cost per park, not total). Jose will want ___ parks and Sara will want ___ parks. Will there be a market failure?
a) 3, 3, nob) 3, 3, yesc) 3.5, 2, nod) 2, 3.5, noe) 4, 4, yes
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