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Two families A and B live on a dark street. The local council will provide street lights of the families are willing to pay for
Two families A and B live on a dark street. The local council will provide street lights of the families are willing to pay for the running costs which are $40 per month. The demand curve of the two families for the street lights is estimated to be Q=25-0.5P and Q= 15-0.5P, where P is the price the family is willing to pay for the street lights per month.
What is the share of the tax for each of them under Lindahl pricing?
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