Utility from clean air (public good) is us(A) = 55A A^2 and Leo's utility from clean
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Question:
Utility from clean air (public good) is us(A) = 55A − A^2 and Leo's utility from clean air is ul(A) = 45A−2A^2.
A is the amount of clean air in their apartment. In order to clean up the air in their apartment, they have to work together.
The total cost is given by TC (A) = 2A^2 + 40A. What is the socially optimal level of clean air?
Related Book For
Elementary Statistics A step by step approach
ISBN: 978-0073386102
8th edition
Authors: Allan Bluman
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