Four stores have a problem with theft and security is a public good.Let S stand for the number of person-hours of security patrols per week.The marginal benefit of security patrols to each of the stores is given by the formula Patrols cost $25 per hour.Find the marginal social benefit function.

Question

Four stores have a problem with theft and security is a public good.Let S stand for the number of person-hours of security patrols per week.The marginal benefit of security patrols to each of the stores is given by the formula  Patrols cost $25 per hour.Find the marginal social benefit function.

Quizplus · Accepted Answer

The marginal social benefit function takes into account the benefit to all stores, not just one. Therefore, it is the sum of the marginal benefits of each store. Since there are four stores and each has a marginal benefit of S/4, the marginal social benefit function is 11ea8a01_e3b1_c4d3_8b44_ad5cdcc29c5b_TB1639_11. This is because each store benefits from the security patrols, so the total benefit is the sum of each store's benefit.

Four Stores Have a Problem with Theft and Security Is