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collegetown is planning a parade for their conference champion football team. the residents must decide how much to spend on parade floats. the marginal cost of each float is $410. there are two types of football fans in collegetown, regular and diehard. the marginal benefit of each additional parade float is represented in the following table: Q
MBR
MBDH
1
25
55
2
20
50
3
15
45
4
10
40
5
5
35
If Collegetown has 5 regular fans and 9 diehard fans, what is the socially optimal number of parade floats?

Respuesta :

The value of a particular utility for each fan is equal to marginal cost, making four floats the socially ideal number.

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