The Optimal Number of Playgrounds for the Township

The city council divides a community's residents into three groups: individual young adults, families with children, and older adults. The following table summarizes how much each group is willing to pay for each playground.

Group Amount willing to pay
Individual young adults $100
Families with children $200
Older adults $50

The city council must pay $2,250 to build each playground. Which of the following is a characteristic of playgrounds and what is the optimal number of playgrounds for the township to build?

A. Playgrounds are nonrival in consumption, and the optimal number of playgrounds is zero
B. Playgrounds are nonrival in consumption, and the optimal number of playgrounds is two
C. Playgrounds are rival in consumption, and the optimal number of playgrounds is three
D. Playgrounds are nonexcludable, and the optimal number of playgrounds is zero
E. Playgrounds are excludable in consumption, and the optimal number of playgrounds is two

What is the correct characteristic of playgrounds and the optimal number of playgrounds for the township to build? D: "Playgrounds are nonexcludable, and the optimal number of playgrounds is zero" is the correct answer. Non-excludable goods are goods that cannot be restricted to a specific group of consumers and therefore everyone has access to it, regardless of whether they pay for it or not. In this case, the playgrounds are non-excludable, meaning that everyone in the community has access to them. The optimal number of playgrounds to build is zero because it is not possible to exclude anyone from using them, and the costs of building them will not be covered by the fees collected from the residents.
← Understanding management services organizations mso Calculate the total production cost of 5300 anchors →

More Posts: