Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. The three residents are trying to determine how large, in acres, they should build the public park. The following table shows each resident's willingness to pay for each acre of the park.AcresWillingness to Pay(Dollars)SophiaAmberCedric11024628185361444383516260417020 Refer to Table 11-1. Suppose the cost to build the park is $24 per acre. How many acres should the park be to maximize total surplus from the park in Springfield?

Solution: Willingness to pay refers to the maximum price that a customer will be willing to pay for…

Answered: Consider the town of Springfield with…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. The three residents are trying to determine how large, in acres, they should build the public park. The following table shows each resident's willingness to pay for each acre of the park.

Acres	Willingness to Pay (Dollars)
Sophia	Amber	Cedric
1	10	24	6
2	8	18	5
3	6	14	4
4	3	8	3
5	1	6	2
6	0	4	1
7	0	2	0

Refer to Table 11-1. Suppose the cost to build the park is $24 per acre. How many acres should the park be to maximize total surplus from the park in Springfield?

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