Consider two consumers with the following demands for a public good, G:

p1 = 10 (1/10)G

p2= 20 - (1/10)G

where p(i) is the price that i is willing to pay for quantity G.

(a) What is the optimal level of public good if the marginal cost of the public good is $25?

(b) Suppose the marginal cost of the public good is $5. What is the optimal level?

(c) Suppose the marginal cost of the public good is $40. What is the optimal level? Explain why.