Refer to the information given in Table 16.6 below to answer the question that follows.
Table 16.6 $\begin{array} { ccc } \text { Number of } & \text { Tim's } & \text { Al's }\
\text {Police Officers}& \text { Willingness to Pay}& \text { Willingness to Pay}\
\hline1 & \$ 100 & \$ 60 \
2 & 80 & 20 \
3 & 50 & 0\
\hline
\end{array}$

-Refer to Table 16.6. Assume that the marginal cost of hiring a police officer is $100. If A and B are the only two people in the society, the optimal number of police officers is
A) 1.
B) 2.
C) 3.
D) indeterminate from this information.

Question

Refer to the information given in Table 16.6 below to answer the question that follows.
Table 16.6 $\begin{array} { ccc } \text { Number of } & \text { Tim's } & \text { Al's }\
\text {Police Officers}& \text { Willingness to Pay}& \text { Willingness to Pay}\
\hline1 & \$ 100 & \$ 60 \
2 & 80 & 20 \
3 & 50 & 0\
\hline
 \end{array}$

-Refer to Table 16.6. Assume that the marginal cost of hiring a police officer is $100. If A and B are the only two people in the society, the optimal number of police officers is
A) 1.
B) 2.
C) 3.
D) indeterminate from this information.

Quizplus · Accepted Answer

The marginal benefit of hiring the second police officer is $80, which exceeds the marginal cost of $100. The marginal benefit of hiring the third police officer is $50, which is less than the marginal cost of $100. Therefore, the optimal number of police officers is 2.

Refer to the Information Given in Table 16 -Refer to Table 16