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Suppose two consumers, A and B, each have an individual demand for a pure public good.The demands are given by: Q A = 60 -
Suppose two consumers, A and B, each have an individual demand for a pure public good.The demands are given by: QA = 60 - 2P and QB = 30 - P.At the socially optimal level of provision, what are the equilibrium Lindahl prices to consumer A and consumer B?
QA = 60 - 2P 2P = 60 - Q
QB = 30 - P P= 30 - Q
P = 30- Q/2
QA= 60/2 - Qa/2
QA = 30-10 = 20
QB = 30 - Q
QB = 30 - 20 = 10
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