Use the table below, which shows the demand for a public good in an economy consisting of

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Use the table below, which shows the demand for a public good in an economy consisting of two households, A and B, to answer a to d below.image text in transcribed

a. Graph the individual demand curves and the market demand curve.

b. What would make you doubt that the table is an accurate reporting of the individual demand curves?

c. If the marginal cost of providing 1 unit of the good is $2.00, what is the socially optimal amount of the public good?

d. Given the free rider problem, is your answer to c most likely an underestimate or an overestimate?

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Related Book For  book-img-for-question

Microeconomics

ISBN: 9781260507140

11th Edition

Authors: David Colander

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