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Could you give an explanation fot this question? I confuse since it has 3 person and 2 good. I need the answer to compete with

Could you give an explanation fot this question? I confuse since it has 3 person and 2 good. I need the answer to compete with mine

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3) (20 points) Consider a 3 person 2 good economy where there is a private good x and a public good y. Agent 1 has a private endowment of 1 unit, agent 2 has a private endowment of 2 units and agent 3 has a private endowment of 3 units. Initially there is no public good in the economy but each unit of the public good can be produced using 1 unit of the private good. That is, the cost function is C(y) = y. Utility functions of the agents are as follows: U1 ( x 1, y) = xly U2 ( X 2, y ) = (x2) 2y U3 ( X3, y) = (x3) 3y Either prove or disprove the following statement: "market failure occurs in this environment/question."

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