Imagine that by using provision points with money back guarantees and rebates, each individual instead reveals 95% of their true WTP for each quantity. New New New True True Revealed True Revealed Person Revealed MB(q=1) MB(q=2) MB(q=3) MB(q=1) MB(q=2) MB(q=3) A $100 $50 $25 $80 $40 $20 Social MC(q=1) MC(q=1) MC(q=2) MC(q=2) MC(q=3) MC(q=3) $40 $40 $40 $40 $40 $40 Pass/Fail Based on the new revealed marginal benefits, what is the highest quantity that will pass? q=0 q=3 q=2 q=1

Imagine that by using provision points with money back guarantees and rebates, each individual instead reveals 95% of their true WTP for each quantity. New New New True True Revealed True Revealed Person Revealed MB(q=1) MB(q=2) MB(q=3) MB(q=1) MB(q=2) MB(q=3) A $100 $50 $25 $80 $40 $20 Social MC(q=1) MC(q=1) MC(q=2) MC(q=2) MC(q=3) MC(q=3) $40 $40 $40 $40 $40 $40 Pass/Fail Based on the new revealed marginal benefits, what is the highest quantity that will pass? q=0 q=3 q=2 q=1

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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