The table below provides information on the prices Lewis and Mills are willing to pay for various
Fantastic news! We've Found the answer you've been seeking!
Question:
The table below provides information on the prices Lewis and Mills are willing to pay for various quantities of a public good. These two people are the only members of society. Determine the price that society is willing to pay for the public good at each quantity of output.
Lewis | Mills | Society | |||
P | Q d | P | Q d | P | Q d |
$4.00 | 1 | $4.00 | 0 | $ | 1 |
3.50 | 2 | 3.50 | 0 | 2 | |
3.00 | 3 | 3.00 | 0 | 3 | |
2.50 | 4 | 2.50 | 0 | 4 | |
2.00 | 5 | 2.00 | 1 | 5 | |
1.50 | 6 | 1.50 | 2 | 6 | |
1.00 | 7 | 1.00 | 3 | 7 | |
0.50 | 8 | 0.50 | 4 | 8 |
If the government’s marginal cost of providing this public good is constant at $5, how many units of the public good should government provide?
Related Book For
Essentials of Statistics for the Behavioral Sciences
ISBN: 978-1464107771
3rd edition
Authors: Susan A. Nolan
Posted Date: