A large rural county is considering establishing a medical transport unit that would use helicopters to fly emergency medical cases to hospitals. Analysts have attempted to estimate the benefits from establishing the unit in two ways. First, they surveyed a random sample of residents to find out how much they would be willing to pay each year for the unit. Based on responses from the sample, the analysts estimated a total willingness to pay of $8.5 million per year. Second, the analysts estimated the dollar value of the improvements in health outcomes and avoided medical costs of users of the unit to be $6.2 million per year.

Required:

a. Given the information above, what would be the aggregate annual option price for the transport unit? Why?
b. Given the information above, what would be the annual total expected gain in social surplus from use of the transport unit? Why?
c. Given what you know from parts a. and b., what is the annual aggregate option value for the transport unit? Why?