Question
Two families (A and B) live on a street without lights. The local council will provide street lights if the families are willing to pay
Two families (A and B) live on a street without lights. The local council will provide street lights if the families are willing to pay for the running costs, which are $30 per month per street light. The demand for the two families for street light is estimated to be = 40 2 and = 30 2, where P is the price the family is willing to pay for a street light per month. a) Express the total demand function for street lights. b) How many street lights should be provided? c) What would be the share of tax burden for each of them under Lindahl pricing?
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