1. A careful empirical study estimates that the (inverse) demand curve for fire protection services for a representative household is given by the following equation: P = 20 - (Q/2). a. Draw the demand curve and calculate the total willingness to pay for 20 units of fire protection services for a representative household. b. If the representative household pays $100 in taxes to fund publicly provided fire protection services, what is the consumer surplus/net benefit to the household?

1. A careful empirical study estimates that the (inverse) demand curve for fire protection services for a representative household is given by the following equation: P = 20 - (Q/2). a. Draw the demand curve and calculate the total willingness to pay for 20 units of fire protection services for a representative household. b. If the representative household pays $100 in taxes to fund publicly provided fire protection services, what is the consumer surplus/net benefit to the household?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 8PA

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