Question
Suppose there are two consumers of a public good, one with a marginal benefit of 10-Q;...
Suppose there are two consumers of a public good, one with a marginal benefit of 10-Q; the other a marginal benefit of 30-2Q, where Q is the quantity of that public good. The public good can be provided with MC = 20 What is the optimal quantity that maximizes the society’s net benefit to that public good?
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
Suppose there are two consumers of a public good, one with a marginal benefit of 10-Q;...
Suppose there are two consumers of a public good, one with a
marginal benefit of 10-Q; the other a marginal benefit of 30-2Q,
where Q is the quantity of that public good. The public good can be
provided with MC = 20.
a) how many quantities of the public good will be provided
assuming that the low-demand consumer will free ride on the
high-demand consumer?
b) what is the sum of total consumer surplus to the two
consumers under a...
Public goods consider an economy with two consumers, Ben and joe. there is public good in...
Public goods consider an economy with two consumers, Ben and
joe. there is public good in this economy in a form of tomado
series. Ben's demand for the tomado series is given by p=10-Q, and
Joe's demand for tomado series is p=8-2Q. The marginal cost for
providing tomado series in the markets is constant at MC=9. i)
Which two properties must be satisfied for series to qualify to be
public good? ii) Is there a problem for free rider problem?...
Consider the demand for a public good estimated for two sets of consumers: P1 = -0.5Q...
Consider the demand for a public good estimated for two sets of
consumers:
P1 = -0.5Q + 10
P2 = -0.25Q + 5
where P is the price that each consumer is willing to pay at
difference levels of quantity. The cost of providing one additional
unit of this public good is $4 (e.g., marginal cost (MC) = $4)
a) Derive the equation of the market demand curve for this
public good. Hint: Remember that in this case you
have...
The social marginal cost of producing a certain public good is $20 per unit. Society consists...
The social marginal cost of producing a certain public good is
$20 per unit. Society consists of three individuals. Persons 1, 2,
and 3 value the public good according to the following marginal
benet schedules: MB1 = 60 − Q, MB2 = 120 − 3Q, and MB3 = 150 − 2Q,
where Q denotes the number of units of the public good provided.
Assume that, at any quantity Q that makes a person's marginal benet
become negative, that person's MB...
1. Suppose a monopolist faces the demand for its good or service equal to Q =...
1. Suppose a monopolist faces the demand for its good or service
equal to Q = 130 - P. The firm's total cost TC = Q2 +
10Q + 100 and its marginal cost MC = 2Q + 10. The firm's profit
maximizing output is
2. Suppose a monopolist faces the demand for its good or service
equal to Q = 130 - P. The firm's total cost TC = Q2 +
10Q + 100 and its marginal cost MC...
Suppose the demand curve for a public park is Q = 80 – 2p, where Q...
Suppose the demand curve for a public park is Q = 80 – 2p, where
Q is the number of visitor-days and p is the entry price. The
marginal cost of operating the park is MC = 10.
What is the efficient level of entrance fee and the number of
visitors at this fee level (assume no congestion problems)?
At the price/quantity combination of (a), what is the price
elasticity of demand for park visitation? (To find this, take a...
Two firms produce a good q and receive a price p = 10 for the good....
Two firms produce a good q and receive a price p = 10 for the
good. Firm 1 has marginal costs MC1 = q while firm 2 has marginal
costs MC2 = 2q. The production of each unit causes marginal
external damage of 2 monetary units. The government wants to limit
production with a cap and trade system. What is the optimal cap on
total production?
Aggregating preferences for private and public goods a. Suppose Johns demand for tacos is P=6-Q and...
Aggregating preferences for private and public goods
a. Suppose Johns demand for tacos is P=6-Q and Annas demand is
P=6-2Q. Write down an equation for the social marginal benefit as a
function of Q [i.e. SMB=P=f(Q)] of taco consumption. If the
marginal cost of producing each taco constant at $2 per taco, what
is the socially optimal number of tacos produced and consumed?
b. Now, suppose Johns demand for fighter jets is
P=$10,000,000-(2,000,000*Q) and Annas is
P=$5,000,000-(1,000,000*Q). Derive the social...
Consumer A’s price per unit Consumer B’s price per unit Consumer C’s price per unit Marginal...
Consumer A’s price per unit
Consumer B’s price per unit
Consumer C’s price per unit
Marginal Social Benefit
QD
$
1
$11
$12
$15
$
2
$9
$8
$12
$
3
$6
$5
$9
$
4
$5
$1
$5
Fill in the Marginal Social Benefit (MSB) in the above table for a
public good based on a economy of these 3 consumers.
If this public good has a constant marginal cost (MC) of $20,
what is the socially optimal number...
Consumer A’s price per unit Consumer B’s price per unit Consumer C’s price per unit Marginal...
Consumer A’s price per unit
Consumer B’s price per unit
Consumer C’s price per unit
Marginal Social Benefit
QD
$
1
$11
$12
$15
$
2
$9
$8
$12
$
3
$6
$5
$9
$
4
$5
$1
$5
Fill in the Marginal Social Benefit (MSB) in the above table for a
public good based on a economy of these 3 consumers.
If this public good has a constant marginal cost (MC) of $20,
what is the socially optimal number...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 3 minutes ago
asked 5 minutes ago
asked 8 minutes ago
asked 29 minutes ago
asked 33 minutes ago
asked 40 minutes ago
asked 54 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago