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Suppose that every time one of these widgets is purchased, the widget spontaneously produces a spectacular fireworks display that is enjoyed by all...

Suppose that every time one of these widgets is purchased, the widget spontaneously produces a spectacular fireworks display that is enjoyed by all of the people in the immediate neighborhood.   Each of these fireworks displays is estimated to provide thrills and excitement for the onlookers (not including the purchaser) that would otherwise cost $100 to provide.  Thus the external benefit generated by the sale of themarginal widget is $100, regardless of how many widgets are purchased. 

This question was asked on Mar 18, 2010.

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