Agreed, Jiro is making this error. They postulates a situation where people pay (they say "willing to pay," but clearly is not talking about consumer surplus) 50, but 20 is enough. What Jiro and readers should wonder is why people are paying so much more than necessary to get what they want, and how Jiro knows this but the people in the actual situation do not.
Not exactly. The assertion is that you dont have to go all the way to equilibrium to capture most of the benefit while preventing most of the repugnant results of equilibrium.
This thread is for asking any questions that might seem obvious, tangential, silly or what-have-you. Don't be shy, everyone has holes in their knowledge, though the fewer and the smaller we can make them, the better.
Please be respectful of other people's admitting ignorance and don't mock them for it, as they're doing a noble thing.
To any future monthly posters of SQ threads, please remember to add the "stupid_questions" tag.