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The rm Unstad considers developing a new product that is non-rival and non-excludable. There are 1000 potential users of the product and in a questionnaire
The rm Unstad considers developing a new product that is non-rival and non-excludable. There are 1000 potential users of the product and in a questionnaire each of these says that the value which they each would attach to having access to this new product is 5 kronor. Assume that development costs are estimated to be 3000 kronor. Would a welfare analysis indicate that the product should be developed or not? Would you suggest that Unstad go ahead and develop the product or not? Be sure to motivate your response
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