Question: May you explain it step by step such as how it was arrived rather than repeating of what was just said in the answer, take
May you explain it step by step such as how it was arrived rather than repeating of what was just said in the answer, take it if you are confident, thanks


A government is trying to decide how much of a public good to provide. The willingness-to-pay curves for each of its two citizens are as given in the diagram. The marginal cost curve for the public good is given by MC = (1/2, where Q is the quantity of the good. There is also a xed cost of 10 associated with production of the good. a IIIIIIIIIIIIIIII 7 III-IIIIIIIIIIII Ch U'I A be M 5!! a:- .h! A's willingness to pay l2 l3 14 15 16 a. What is the optimal quantity of the public good? b. If both citizens must be taxed equally to provide the good, will it receive a majority vote? c. On the assumption that the public good is provided at the optimal level, how much should the state charge each citizen each time he or she uses the public good? a. The optimal quantity of the public good is 6, the quantity for which the aggregate willingness-to-pay curve intersects the marginal cost curve. Total willingness to pay is (27), which is the area under the aggregate w.t.p. curve up to Q = 6. This exceeds the public good 's total cost ofI 9, which is 10 plus the area under the marginal cost curve up to Q = 6. aggregate w.t.p. curve 6 MC B's w.t.p. curve 4 3 A's w.t.p. curve 2 1 0 3 5 6 12 Quantity b. The mostA is willing to pay for the public good is the area under his w.t.p. curve up to Q = 6, which is 9. If B can be taxed no more thanA is willing to pay, then 18 is the most that can be raised in taxes, and that is not enough to nance the optimal quantity of this public good. c. By denition, the marginal cost of an additional person using a public good is zero ( the non-diminishability criterion). Accordingly, there should be no charge for the use of the public good
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