Suppose 10 people each have the demand Q = 20 – 4P for streetlights and 5 people have the demand Q = 18 – 2P for streetlights. The cost of building each streetlight is3. If it is impossible to purchase a fractional number of streetlights, how many street lights are socially optimal?
Answer to relevant QuestionsAndrew, Beth, and Cathy live in Lindhville. Andrew’s demand for bike paths, a public good, is given by Q = 12 – 2P. Beth’s demand is Q = 18 – P, and Cathy’s is Q = 8 – P/3.The marginal cost of building a bike ...How does the opportunity cost of a government purchase vary depending on whether the market for the purchased good is perfectly competitive or monopolistic? One approach to calculating the value of life involves the use of compensating differential studies. What informational problems make these studies difficult to carry out? The preference revelation problem associated with Lindahl pricing becomes more severe as the number of people in society increases. Why do you think this is true? Alfie, Bill, and Coco each value police protection differently. Alfie’s demand for the public good is Q = 55 – 5P, Bill’s demand is Q = 80 – 4P, and Coco’s demand is Q = 100 – 10P. If the marginal cost of ...
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