Answer the next questions using this table.

Three people live along Strasse Street: Dunkel, Schwarz, and Nacht. They would like to have streetlights installed, but differ on how valuable they think the lights are. The table below indicates the value each person place on additional streetlights:

Number of
Lights
Marginal Value
to Dunkel
Marginal Value
to Schwarz
Marginal Value
to Nacht
First
$120
$85
$55
Second
100
70
50
Third
65
40
45
Fourth
55
25
25
Fifth
20
0
10
Sixth
0
0
0
The cost of each light is $90.00. Once installed, it is a public good--its benefits are available to all. (Assume that location of the lights is not a variable to worry about.)

If these three rely on dollar voting to make decisions, and each acts independently of the others, how many lights will be installed?


If the three use majority voting, splitting all cost evenly, how many lights will be installed?


What is the economically efficient number of lights?


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