Question: Please briefly explain the solution asap Suppose there are 4 people each having the demand curve for street lights and another 2 people each having
Please briefly explain the solution asap
Suppose there are 4 people each having the demand curve
for street lights and another 2 people each having the demand
The Mayor of their town considers street lights to be a public good and is charged with purchasing the optimal number of street lights from Boones Light Shop. Boones is willing to sell street lights for $18 per light.
- In what sense, if any, do street lights qualify as a public good? What is the relationship between Qis and Qjs likely to be when the Mayor installs the lights? Why?
- What quantity of street lights should the Mayor purchase? Why?
- Suppose the Mayor is able to implement a pricing scheme to charge users for the illumination services. By how much each person in each group will be charged for each streetlight? By how much each person in each group will be charged for the total amount of street lights? Does the tax revenue cover the total cost of providing the optimal number of streetlights?
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