Please answer this question using a graph.Suppose a new social service is introduced by agovernment at a cost of $3,000. This service has notbeen provided before and there is no availablesubstitute for this service. Economists haveestimated that the marginal benefit of the newservice is given by:MB = 100 – x%3Dwhere x is the quantity (in hours) of the service thatis used. Please note the MB gives both the marginalprivate benefit (MPB) and marginal social benefit(MSB) (i.e., MB = MPB = MSB).%3DQuestion: suppose the $3,000 investment canonly provide 50 hours of service. Explain whatyouthink will happen if the service is provided for free.

Marginal Benefit (MB) is defined as the satisfaction which is derived by a consumer from the…

Answered: Suppose a new social service is…

Suppose a new social service is introduced by a government at a cost of $3,000. This service has not been provided before and there is no available substitute for this service. Economists have

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Chapter1: Making Economics Decisions

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