Question: Please answer this question and draw all the graphs. Thank you Q5. A government is planning to organise public fireworks. Their analysists split the population

Please answer this question and draw all the graphs. Thank you

Please answer this question and draw all the graphs. Thank you Q5.

Q5. A government is planning to organise public fireworks. Their analysists split the population of the country into 2 groups based on income. They estimated the willingness- to-pay curves for both groups: P1 = 5 - 0.501, P2 = 1 - 0.2502, where Q is the length of the show. The marginal costs of organising a fireworks show of length Q are MC = = Q2 and there is also a fixed cost of = associated with the event. a) Derive the total willingness-to-pay curve. Plot it on a graph together with the group- specific willingness-to-pay curves. [4 marks] b) Find the optimal length of the fireworks show [3 marks] c) What happens to the optimal length of a fireworks show as the population changes? What about as average income levels change? What happens to the optimal length as the fixed or marginal costs change? [3 marks]

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