Question

Q14- Public Goods & Market Failure / Lost of Efficiency Tom and Jerry both enjoy watching documentary shows. The demand function by Tom is Q = 5 - 0.25P, while the demand function by Jerry is Q = 15 - 0.5P. The documentary shows are broadcasted free-of-charge via the free to air channel.Assuming Tom and Jerry are the only consumers, discuss how you would obtain the market demand curve for documentary shows. Construct and draw the diagram of the market demand curve for the documentary shows, clearly labelling key prices and quantities on the axes, and including Tom's demand curve, Jerry's demand curve, and the combined market demand curve.A company can produce documentary shows and broadcast to both Tom and Jerry at a constant marginal cost of $20. What is the efficient quantity of documentaries that should be produced for this market