Biology Forums - Study Force

Determining How Much of a Public Good to Supply

Jack and Jill both own businesses on a deserted road and both need a security guard. Once a security guard is hired, the guard will be able to protect both businesses despite who hires the security guard. The table shows the price Jack and Jill are willing to pay for each hour of protection.

Quantity (hours of protection)	Jill's willingness to pay (dollars per hour)	Jack's willingness to pay (dollars per hour)
1	76​	74​
2	74​	72​
3	72​	70​
4	70​	68​
5	68​	66​

Suppose the security guard has a constant marginal cost of $138 dollars an hour. What is the optimal number of hours of security guard services?

▸ 1 hours

▸ 4 hours

▸ 0 hours

▸ 3 hours

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