The 20 Residents of the Village of Towneburg Are Considering
The 20 residents of the village of Towneburg are considering hosting a fireworks show next summer.The total cost of the show is estimated to be $1,000 + $10 per unit.Each resident's demand for fireworks is identical: P = 50 - 2 * units as shown below:
Suppose that the units of the fireworks display are measured not by the number of units of fireworks but by the number of people who watch them.Assume that Towneburg roads are never congested and that the display will be shown over a large body of water.If that is the case
A) marginal cost is still 10 but there will be more free riders.
B) marginal cost is zero.
C) nothing is different in the economic analysis.
D) marginal costs will increase with the number of viewers.