Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help? Question 7 (Challenging). Consider three housemates: Mitchell, Paul and Achini. They are deciding how many hours per day to run the air conditioning

Please help?

image text in transcribed
Question 7 (Challenging). Consider three housemates: Mitchell, Paul and Achini. They are deciding how many hours per day to run the air conditioning in their apartment. Collectively, their aggregate demand for air conditioning hours is P = 12 % where Q is in hours. Individually, Mitchell demands P = 8 g and Paul demands P = 3 g. a) Find Achini's individual demand for air conditioning. b) If the marginal cost of running the air conditioning for an additional hour is $2, how much air conditioning will Mitchell, Paul and Achini demand if they individually and independently decide? c) What is the socially optimal number of hours to run the air conditioning for in their apartment? d) Calculate the DWL from not consuming this quantity. e) What are Mitchell, Paul and Achini's Lindahl prices for the socially optimal quantity

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Organizational Behavior And Management

Authors: John Ivancevich, Michael Matteson

6th Edition

0072436387, 978-0072436389

More Books

Students also viewed these Economics questions

Question

2. How do I perform this role?

Answered: 1 week ago