Advertising agencies have looked into projecting logos on the moon, which is a public good. Oscar and
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Advertising agencies have looked into projecting logos on the moon, which is a public good. Oscar and Craig both prefer a logo-free moon. Oscar's demand curve for logo-free days each year is a straight line starting at $365 with a slope of-1. Craig's demand curve is a straight line starting at $182.50 with a slope of-1/2. Draw Oscar and Craig's demand curves and the market demand curve, assuming they are the only two moon-lovers in the market. Suppose that through Coasian bargaining, logo-free days can be purchased for $200 each. Draw the price line and indicate the socially optimal quantity. How many days would be purchased if Craig were a free rider?
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Related Book For
Environmental Economics And Natural Resource Management
ISBN: 9780415640954
4th Edition
Authors: David A. Anderson
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