Friday, October 10, 2014

Visitors to National Parks cause damage and increase maintenance costs on the parks. The marginal...

Visitors to National Parks cause damage and increase maintenance costs on the parks. The marginal external cost of visitors is: MEC(q) = 1.5q, where q is the number of visitors to National Parks in thousands. The marginal benefit to visitors of attending National Parks is:Visitors to National Parks cause damage and increase maintenance costs on the parks. The marginal external cost of visitors is: MEC(q) = 1.5q, where q is the number of visitors to National Parks in thousands. The marginal benefit to visitors of attending National Parks is:MB(q) = 75 â�\" 0.5q.(a) If the Parks do not charge a fee, how many visitors will attend the National Parks?(b) What is the socially optimal level of park visitors?(c) If the National Parks were to establish an entrance fee, what is the optimal level of the fee?

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