Home » Suppose Sac State is considering building more new parking lots on campus. The following table shows the marginal benefit to students, faculty/staff,…

Suppose Sac State is considering building more new parking lots on campus. The following table shows the marginal benefit to students, faculty/staff,…

Suppose Sac State is considering building more new parking lots on campus. The following table shows the marginal benefit to students, faculty/staff, and visitors for one to five new lots. The table also gives the total cost of constructing those lots.

Assuming that the lots will not be completely full so that students, staff, and visitors can use them simultaneously, derive the aggregate demand curve or social marginal benefit curve for parking lots. What is the efficient number of additional lots? If this university builds the efficient number of lots, how should the costs be divided among students, faculty/staff, and visitors?

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