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Your local government is contemplating adding a new fireworks show to your town’s Fourth of July festivities. They have calculated that the total cost of producing the show will be $3M, and your town has
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Your local government is contemplating adding a new fireworks show to your town’s Fourth of July festivities. They have calculated that the total cost of producing the show will be $3M, and your town has 300,000 residents. The show would be financed through an increase in taxes on each of these residents. Under what conditions is the provision of the fireworks show the efficient outcome?

User Rudolfv
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Answer:

If the total benefit of the show is greater than or equal to $3M, even if some individuals value the show at less than $10.

User The Process
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