Table 11-3
This table describes the police protection demands for three equal sized groups of people in Safetyville. The second, third, and fourth columns show the number of person-hours of police protection per day that a group will demand for a given price (the first column).
-Refer to Table 11-3. If the marginal cost of police protection is constant at $36 per person-hour, what is the efficient level of police protection to provide?
A)9 units
B)39 units
C)66 units
D)99 units

Question

Table 11-3
This table describes the police protection demands for three equal sized groups of people in Safetyville. The second, third, and fourth columns show the number of person-hours of police protection per day that a group will demand for a given price (the first column). 
-Refer to Table 11-3. If the marginal cost of police protection is constant at $36 per person-hour, what is the efficient level of police protection to provide?
A)9 units 
B)39 units 
C)66 units 
D)99 units

Quizplus · Accepted Answer

The efficient level of police protection is where the marginal cost equals the marginal benefit. In this case, the marginal cost is given as $36 per person-hour. Looking at the table, we can see that for the first 66 units of police protection, the marginal benefit is greater than or equal to $36 per person-hour. Beyond 66 units, the marginal benefit decreases and becomes less than $36 per person-hour. Therefore, the efficient level of police protection to provide is 66 units.

Table 11-3 This Table Describes the Police Protection Demands for Three Equal