The following recreation demand function is for a beach: x = 4 (p/500) + q. The

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The following recreation demand function is for a beach: x = 4 − (p/500) + q. The visitation amount is represented by x (times), the travel cost is represented by p

(yen), and the water quality is represented by q (points).

a. Assume current water quality is 0 (q = 0). Express a given traveler’s consumer surplus if their travel cost were 1,000 yen.

b. Assume that when water quality improvement policy is executed, water quality increases by two points, resulting in q =2.

Express how muchthe water quality improvement policy was for the traveler.

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Environmental Economics

ISBN: 9781138960695

1st Edition

Authors: Shunsuke Managi , Koichi Kuriyama

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