If a regulator (the government) knew the marginal willingness to pay by each of the three homeowners, how
much should the regulator charge each (A, B, and C)?
Marginal Willingness to
Pay ($ per year)
Level of
Home-
Contaminant
(ppm)
Home-
Home-
owner A owner B owner C
60
110
85
Aggregate Marginal Cost
of Cleanup
MWP
200
140
50
6
9
150
50
240
Ο 15, 70, 10
Ο 55,0, 10
Ο 110,35,15
Ο 70,10,15
Ο 70, 60, 20