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Suppose Megan's (truthful) demand for public good is Q = 100 - P. Karl's (truthful) demand for the same public good is Q = 100

Suppose Megan's (truthful) demand for public good is Q = 100 - P. Karl's (truthful) demand for the same public good is Q = 100 - 1/3 P. The marginal cost of supplying the public good is P = Q.

a.What is the socially efficient number of the good that should be produced?

b.What would be the level provided by the private sector? Is the level higher or lower? Why?

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