a. On the basis of the three individual demand schedules below, and assuming these three people are the only ones in the society, determine the collective demand schedule on the assumption that the good is a public good. Instructions: Enter your answers as a whole number. Individual 1 Price $8 7 6 5 4 3 2 1 Qd 1 2 $6 $3 3 4 5 6 7 8 Optimal quantity = s 10 8 6 Individual 2 4 2 1 0 0 Price $8 7 6 5 4 3 2 1 Qd 1 2 4 3 4 5 6 7 8 Individual 3 Price $8 7 6 5 4 3 2 1 b. Use the public demand schedule above and the following supply schedule to ascertain the optimal quantity of this public good. Supply of Public Good Price $24 $21 $18 $15 $12 $9 Qd 1 2 3 4 5 6 7 8 Demand for Public Good Price Qd 1 2 3 4 5 6 7 8
a. On the basis of the three individual demand schedules below, and assuming these three people are the only ones in the society, determine the collective demand schedule on the assumption that the good is a public good. Instructions: Enter your answers as a whole number. Individual 1 Price $8 7 6 5 4 3 2 1 Qd 1 2 $6 $3 3 4 5 6 7 8 Optimal quantity = s 10 8 6 Individual 2 4 2 1 0 0 Price $8 7 6 5 4 3 2 1 Qd 1 2 4 3 4 5 6 7 8 Individual 3 Price $8 7 6 5 4 3 2 1 b. Use the public demand schedule above and the following supply schedule to ascertain the optimal quantity of this public good. Supply of Public Good Price $24 $21 $18 $15 $12 $9 Qd 1 2 3 4 5 6 7 8 Demand for Public Good Price Qd 1 2 3 4 5 6 7 8
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section: Chapter Questions
Problem 8QP
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Transcribed Image Text:Problem 05-02 (algo)
a. On the basis of the three individual demand schedules below, and assuming these three people are the only ones in the society,
determine the collective demand schedule on the assumption that the good is a public good.
Instructions: Enter your answers as a whole number.
Individual 1
Price
$8
7
6
5
4
3
2
1
Qd
1
2
3
4
5
6
7
8
$24
$21
$18
$15
$12
$9
$6
$3
Optimal quantity =
Individual 2
Supply of Public Good
Price
Qs
10
8
6
4
2
Price
$8
7
6
5
4
3
1
0
0
2
1
Qd
1
2
3
4
5
6
7
8
4
Individual 3
Price
$8
7
6
5
4
b. Use the public demand schedule above and the following supply schedule to ascertain the optimal quantity of this public good.
3
2
1
Qd
1
2
3
4
5
6
7
8
Demand for Public Good
Price
Qd
1
2
3
4
5
6
7
8
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