Question: Question 3: Public Goods Provision (35 points) Consider three consumers indexed by i = {1, 2, 3} with the following demand functions for a public

Question 3: Public Goods Provision (35 points) Consider three consumers indexed by i = {1, 2, 3} with the following demand functions for a public good G: P1 = 100 10G, P2 = 200 15G, P3 = 300 45G where pi is the price consumer i is willing to pay for G.

(a) (10 pts) If marginal cost is constant at $50, what is the private provision of public good G?

(b) (10 pts) If marginal cost is constant at $50, what is the optimal provision level of public good?

(d) (10 pts) If marginal cost is constant at $400, what is the optimal provision level of public good?

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