There are 500,000 people in Merageville. Each one of them enjoys hikes through the forest at the edge of town. The city council has just sold this land to a developer for $10 million Suppose that each person values access to the forest at $25. What is the Pareto efficient use of the land? Be precise in your description of why it is Pareto efficient. Given this, why is it likely that the Pareto efficient outcome is probably not going to happen? . Given this, what is the role of government in bringing about Pareto-efficiency?

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