Exhibit 14-3 Impact of flights on house valueEach time Orville flies over Wilber's house, the noise reduces the value of Wilbur's house. The table shows the profits to Orville of each flight, and the value of Wilbur's house.
Numberof flights
Totalprofits
Marginalprofits
Value of Wilbur'shouse
1
$10,000
$10,000
$100,000
2
18,000
8,000
95,000
3
24,000
6,000
90,000
4
28,000
4,000
85,000
5
30,000
2,000
80,000
As shown in Exhibit 14-3, at the socially efficient number of flights, what will be the market value of Orville's house?
A. $100,000.
B. $95,000.
C. $90,000.
D. $85,000.
Answer: C
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