11. Suppose Mr. Smith's demand for fireworks is given by P = 20 - QP and...

 

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11. Suppose Mr. Smith's demand for fireworks is given by P = 20 - QP and Mr. Goldblum's demand for fireworks is given by P = 15 - QP. Also assume it costs 30 dollars to put on a small fireworks display. (a) Can Mr. Smith afford to put on a single display (QP = 1) all on his own? (b) Can Mr. Goldblum afford to put on a single display (QP = 1) all on his own? (c) Can Mr. Smith and Mr. Goldblum put on the display together? (d) Why might Mr. Smith and Mr. Goldblum not be able to put on the display together? (e) Name a way the fireworks display could still be put on (overcoming the free rider problem). 11. Suppose Mr. Smith's demand for fireworks is given by P = 20 - QP and Mr. Goldblum's demand for fireworks is given by P = 15 - QP. Also assume it costs 30 dollars to put on a small fireworks display. (a) Can Mr. Smith afford to put on a single display (QP = 1) all on his own? (b) Can Mr. Goldblum afford to put on a single display (QP = 1) all on his own? (c) Can Mr. Smith and Mr. Goldblum put on the display together? (d) Why might Mr. Smith and Mr. Goldblum not be able to put on the display together? (e) Name a way the fireworks display could still be put on (overcoming the free rider problem).

Answer rating: 100% (QA)

To determine if Mr Smith and Mr Goldblum can afford to put on a fireworks display well evaluate their individual and joint affordability based on the ... View the full answer