Question
1: The individual demand function of the consumer is MWTP = 12-1/2Q where Q is the quantity of a private good. How many units of
1: The individual demand function of the consumer is MWTP = 12-1/2Q where Q is the quantity of a private good. How many units of the good does the consumer buy if the price is 6? Please show the result and the way you derived it.
2: What is the total willingness to pay for the number of units that correspond to a price of 6 (the number of units from question 3)? Show the results and the way you derived it.
3: For two consumers with MWTP = 12-1/2Q for a public good Q, what is the aggregate marginal willingness to pay at Q=0? Please show the result and the way you derived it.
Step by Step Solution
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Step: 1
1 MWTP 12 05Q If P 6 6 12 05Q Q 12 2 P 12 0...
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Mathematical Applications for the Management Life and Social Sciences
Authors: Ronald J. Harshbarger, James J. Reynolds
11th edition
9781337032247, 9781305465183, 1305108043, 1337032247, 1305465180, 978-1305108042
