The marginal social cost of each concert

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Summer concerts are a pure public good in the town of Bucktown, The marginal social cost of each concert every night is at $500.

1. Explain why it would be inefficient to require each resident of Bucktown to hire their own band at $500 for each concert.

2. Assuming that the marginal benefit of the first concert is $25 for each of the 1000 people of Bucktown, show graphically that it will be more efficient to have more than one concert per summer.

Reference no: EM131392745

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