Air pollution is a vital issue in China as the economy growing rapidly. In particu and Shanghai are two large cities suffering from the high level of particulate ma which are harmful to environment and health. The level of PM10 in Beijing is 1 Shanghai 79. To reduce the direct exposure to PM, some people wear masks in cities. Assume the demand for mask in Beijing is M= 12 - P and in Shanghai M where M is the number of masks demanded(millions per week) and P is the pri ($).

a. Draw demand curves for mask in Beijing and Shanghai in one diagram.

b. How much is the total willingness to pay of people living in Beijing and Sh remove all PMs? (Assume that masks are able to control PMs significantly)

c. What does the difference between the two demand curves show?

d. Suppose the average price of mask in both cities is $2. How much is the wil pay of people living in Beijing to have air quality improve to that of Shangh

e. How much is theannual willingness to pay of people living in Beijing to ha improve to that of Shanghai? Assume WTP will be a lump sum payment no annual interest rate is 10 percent compounded at the end of each week.

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a To draw the demand curves for masks in Beijing and Shanghai on one diagram we can use the demand f... View the full answer