Yasser and Hikaru are video game fans and they agree to jointly sponsor the prize fund for a tournament. They wish to attract marquee players to the event and they recognize that the larger is the prize fund, the more marquee players they will attract. Suppose Yasser’s demand for marquee players is Q = 100 − 60S_Y , while Hikaru’s demand is Q = 60 − 40S_H, where Q is the number of marquee players who will participate in the event and S_Y and S_H = 1 - S_Y are Yasser’s and Hikaru’s shares of the cost of sponsoring the prize fund.
a. Sketch the demand functions of Yasser and Hikaru in a diagram like Figure 7.1. Identify the Lindahl equilibrium point.
b. What proportion of the prize fund is paid by Yasser at the equilibrium? What proportion is paid by Hikaru? How many marquee players will participate in the tournament?
c. Suppose the total prize fund must be increased by $100 to attract each additional marquee player to the tournament. What is the total size of the prize fund in the equilibrium?

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