Mike Miller is the town manager of Medfield, a town with 50,000 residents. At a recent town meeting, several citizens proposed building a large public swimming pool in the center of town for all of the residents to enjoy. A survey of all 50,000 residents revealed that the pool would be worth $50 to each of them. Because the cost to build the swimming pool is only $1,000,000, Manager Miller arranges to have the pool built. Everyone in town enjoys the pool, but when Manager Miller asks for donations to pay for the pool, he only collects $250,000. Manager Miller soon realizes thatA. the pool is a club good. B. the survey was conducted improperly. C. the cost of the pool exceeded the social benefits. D. most residents of the town are probably free-riders at the pool.

Question

Johnny Collier

Business

27 November, 05:03

Mike Miller is the town manager of Medfield, a town with 50,000 residents. At a recent town meeting, several citizens proposed building a large public swimming pool in the center of town for all of the residents to enjoy. A survey of all 50,000 residents revealed that the pool would be worth $50 to each of them. Because the cost to build the swimming pool is only $1,000,000, Manager Miller arranges to have the pool built. Everyone in town enjoys the pool, but when Manager Miller asks for donations to pay for the pool, he only collects $250,000. Manager Miller soon realizes thatA. the pool is a club good. B. the survey was conducted improperly. C. the cost of the pool exceeded the social benefits. D. most residents of the town are probably free-riders at the pool.

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Answers (1)

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Chana Cardenas · Answer 1

Manager Miller soon realizes that

The pool should be built and paid for by the town government.

Explanation:

The pool should be built and paid for by the town government.

Pay it with tax on the residents because all residents would benefit from it but some residents would not donate if they were asked.