Question 2 a at an individual optimum it is only 1

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Question 2 a. At an individual optimum, it is only 1 firefighter that will be hired, and in this case, Joe-Who will act as a free rider. However, Cindly-Loo will pay for the firefighter as it offers higher benefits to him than it offers to Joe-Who. b. A table showing the entries for the ‘marginal revenue to both.' Marginal benefit for Cindy-Loo-Sue Marginal benefit for Joe-Who Marginal benefit for both #of firefighters Qss= 60 Qsp= 80 Ps= Pp= 20 Qd Pric e SM C P M Quan tity Dead Weight Loss
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Surname 3 16 9 25 1 12 8 20 2 8 5 13 3 7 2 9 4 At the social optimum, the number of firefighters that need to be hired in Whoville will be 3. c. Private markets have hard times offering optimal number of firefighters based on the society's standpoint. The reason is that the markets are unable to achieve an efficient or social optimum, as the nature of their products is non-excludable and non-rival. As a result, this will make many people in the market to be free riders.
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