Consider two consumers of a product A B with an individual demand function Qa 400 5P and Qb 300 2 5Pb respectively where the price in dollars and Q is the quantity demanded Obtain and analyse the marginal social benefit function if the product is a public good Support your answers with a suitable d...

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Consider two consumers of a product A & B with an individual demand function Qa = 400

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Consider two consumers of a product A & B with an individual demand function Qa = 400 - 5P and Qb = 300 - 2.5Pb respectively where the price in dollars and Q is the quantity demanded.

Obtain and analyse the marginal social benefit function if the product is a public good. Support your answers with a suitable diagram.

If the marginal cost of producing the public good is $10, compute the optimal quantity of the public good. How will your answer be different if the marginal cost is $30 instead?

Posted Date: Jun 12, 2024 10:09 PM

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Consider two consumers of a product A & B with an individual demand function Qa = 400

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