The following table shows how the marginal benefit enjoyed by John, Mary, Loren, and all other consumers of outdoor rock concerts varies with the number made available by a city government per summer. a) What would be the efficient number of concerts to produce if the marginal cost of production were $425 instead of $1,000? b) Suppose the marginal cost of producing rock concerts is only $250 per concert no matter how many are produced. Use the data to calculate the efficient number of concerts. c) If a Lindahl scheme is used to finance the concerts, what prices of admission should be charged to John, Loren, and Mary?
The following table shows how the marginal benefit enjoyed by John, Mary, Loren, and all other consumers of outdoor rock concerts varies with the number made available by a city government per summer. a) What would be the efficient number of concerts to produce if the marginal cost of production were $425 instead of $1,000? b) Suppose the marginal cost of producing rock concerts is only $250 per concert no matter how many are produced. Use the data to calculate the efficient number of concerts. c) If a Lindahl scheme is used to finance the concerts, what prices of admission should be charged to John, Loren, and Mary?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The following table shows how the marginal benefit enjoyed by John, Mary, Loren, and all other consumers of outdoor rock concerts varies with the number made available by a city government per summer.
a) What would be the efficient number of concerts to produce if the marginal cost of production were $425 instead of $1,000?
b) Suppose the marginal cost of producing rock concerts is only $250 per concert no matter how many are produced. Use the data to calculate the efficient number of concerts.
c) If a Lindahl scheme is used to finance the concerts, what prices of admission should be charged to John, Loren, and Mary?
Transcribed Image Text:Marginal Benefit of Number of Concert Per Customer in Dollars ($)
Number of Concerts
CONSUMER
3
4
150
125
125
John
Mary
75
50
100
100
75
Loren
100
75
50
25
All others
600
400
200
100
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