Essay
Consider three consumers of a public good with the following marginal benefit of consumption:
Consumer 1: MB1 = 5 - 2Q
Consumer 2: MB2 = 4 - Q
Consumer 3: MB3 = 3 - Q
a. If the marginal cost of producing the public good is MC = 8Q, what is the efficient quantity of it?
b. If the marginal cost of producing the public good is constant at $4, what is the efficient quantity of it?
Correct Answer:
Verified
a. The total marginal benefit ...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q73: Mushroom farms emit unpleasant odors that affect
Q74: The market for toilet paper is characterized
Q75: (Figure: Cost of Pollution) Which of the
Q76: Minnesota has two oil refineries that emit
Q77: (Figure: Benefits of Asparagus) Suppose that eating
Q79: (Table: Neighborhood Playground) The willingness to pay
Q80: The following companies all manufacture widgets and
Q81: The marginal cost of pollution is MC
Q82: The demand curve and supply curve for
Q83: There are three consumers of a public