An economy is composed of two individuals, whose demands for a public good street lighting

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An economy is composed of two individuals, whose demands for a public good – street lighting – are given by P = 12−(1/2)Q and P = 8−(1/3)Q.

(a) Graph these demands on a diagram.

(b) Derive the total demand for this public good by summing the demands vertically, and write down a resulting equation for this demand curve.

(c) Let the marginal cost of providing the good be $5 per unit. Find the efficient supply of the public good in this economy – where the marginal cost equals the total value of a marginal unit

Related Book For answer-question

Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

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Posted Date: Nov 20, 2022 04:54 AM

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An economy is composed of two individuals, whose demands for a public good street lighting

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Answer 201 12 8 market Do ML 5 Saty 18 24 Market DD ... View the full answer

Engineering economy

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