Marginal cost schedule

Marginal cost schedule

1. Answer the following question:

Ross and David are neighbors. During the winter, it is impossible for a snowplow to clear the street in front of Ross’ house without clearing the front of David’s. Ross’ marginal benefit from snowplowing services is 12-Z, where Z is the number oftimes the street is plowed. David’s marginal benefit is 8-2Z. The marginal cost of getting the street plowed is $16. Sketch the two marginal benefit schedules and the aggregate marginal benefit schedule. Draw in the marginal cost schedule, and find the efficient level of provision for snowplowing services.

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