1. Who benefits from the construction of the park? How should the park be distributed? What feedback will the citizens reciprocate? Will management of the park promote progress and inspire future projects? 2. The town would likely need all factors of production; raw materials, human labor, and machinery to construct and maintain the park. 3. The town’s resources are limited. The land value is priced around $125,000 per acre. Limited resources include natural resources, raw material, renewable resources, and actual resources. 4. The consumers using the park will probably be pet owners. 7,000 residents, whom own dogs, are currently registered by the town council. 5. The benefit forgone is the benefit of constructing a dog park. The gross benefit of having the park built is $125,000 per acre; so the net benefit is $625,000. The opportunity cost of not building the park is $3,625,000. Despite holding the largest sum of money, the alternate decision to not build the park leaves less space and recreation. The majority of residents in town are registered pet owners.
Leaving the land undeveloped will waste the opportunity to provide the citizens with free recreation. The only local park that exists in town is not pet-friendly. On the other hand, limiting open space eliminates the burden of management and developing infrastructure. Selling the land to real estate developers to build homes benefits the luxury develops and possible buyers. However, selling the land does nothing to help with the current repairs of the school. This decision might even upset the citizens who want a recreational park instead of a dog park. There is little space available from the natural environment.
Market failures depend on the distribution of the goods. Possible market failures could stem from underinvestment and non-excludability. There are always gains and losses when a public good/service is exchanged. The possible externalities that may produce if the park is built could include noise pollution and visual pollution. The cost used to produce landscape architecture may also exceed the private cost.
The town’s government could substitute some decisions for an environmentally appropriate solution. As the town council already suggested, charging a yearly fee to citizens that use the park. Littering and polluting will result in a double-fee.
Lisa Mullinax, a certified professional dog trainer, fondly remembers taking her canine pal to the park for the first time. She gripped the leash and wandered into the crowd, toward the jubilant cries of a playful pup. Her giddy companion was bound up with energy; she needed to run free amongst the others. “It dramatically improved our bond,” says Mullinax, now teaching group class seminars at 4Paws University. As pointed out above, the lack of recreational dog parks is detrimental because it encourages urbanism over environmentalism. Martinsville has little space for forty new luxury townhouses. The decision to construct a recreational dog park for 7000 of the 100,000 residents implements competitive market equilibrium. With no negative or positive externalities, the consumers and producers are able to benefit from economical efficiency. Dedicating at least one park to the pet owners enables private benefit. The residents may be considered free-riders at the behest of urbanites. Comparatively, Martinsville is a flourishing town. The recent developments are highly valued and consumers are offered great public services.
Even local gyms and country clubs provide recreational opportunities. With a budget surplus, the town can afford the proposal cost, as well as any externalities. However, eliminating an externality is not economically beneficial. With exclusive property rights, comes responsibility. It is a pet owner’s responsibility to ensure the park is clean and manageable. These are the private costs borne of the producers and handled by society at large. The social cost represents the total sum of production, including externalities and privacy costs. Hence, the exclusive right to pet owners in the park privately benefits them. The lack of dog parks reduces opportunity cost; whilst an increase in constructing these parks greatly influences a more holistic view of a company. Not only does the surrounding environment become included in business operations, but ecosystem services as well! Unlike the negative externalities an industrial park may produce (pollution); dog parks are essentially eco-friendly. The proposed location is only slightly wooded and would not require much management. The majority of the townsfolk would likely use the park for its private benefits.