onny, Ken, and Lenny each value fire protection differently. Jonny’s demand for the public good is Q = 210 − 30P, Bill’s demand is Q = 210 − 15P, and Coco’s demand is Q = 132 − 12P. If the marginal cost of providing fire protection is $30.00. a. What is the socially optimal level of fire protection provision? b. Under Lindahl pricing, what share of the tax burden would each of the three people pay
onny, Ken, and Lenny each value fire protection differently. Jonny’s demand for the public good is Q = 210 − 30P, Bill’s demand is Q = 210 − 15P, and Coco’s demand is Q = 132 − 12P. If the marginal cost of providing fire protection is $30.00. a. What is the socially optimal level of fire protection provision? b. Under Lindahl pricing, what share of the tax burden would each of the three people pay
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 2PA
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3. Jonny, Ken, and Lenny each value fire protection differently. Jonny’s demand for the public good is Q = 210 − 30P, Bill’s demand is Q = 210 − 15P, and Coco’s demand is Q = 132 − 12P. If the marginal cost of providing fire protection is $30.00.
a. What is the socially optimal level of fire protection provision?
b. Under Lindahl pricing, what share of the tax burden would each of the three people pay?
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