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7. Assume there are two consumers in the market for a public good. One has the individual demand curve MBA and one has the individual
7. Assume there are two consumers in the market for a public good. One has the individual demand curve MBA and one has the individual demand curve MBB. Assume that provision of the public good costs $75 per unit. 300 275 250 225 200 175 MBA MBB 150 125 100 75 MC 50 25 50 100 150 200 a. Draw the total marginal benefit (vertical sum). (5 points) b. Algebraically write the aggregate willingness-to-pay curve. Calculate the socially optimum quantity. (10 points)
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