Consider a public goods problem. Assume a community has 10 people each with: MBP = 10 – Q, where Q is equal to the quantity of the public good provided in the community. Assume no externality in public good production: MCP = MCS = 10. Assume a rich philanthropist offers to pay half the cost of every voluntary donation. Given this subsidy, the community will choose to donate ____ total units of Q with a deadweight lost of ____ ?
Consider a public goods problem. Assume a community has 10 people each with: MBP = 10 – Q, where Q is equal to the quantity of the public good provided in the community. Assume no externality in public good production: MCP = MCS = 10. Assume a rich philanthropist offers to pay half the cost of every voluntary donation. Given this subsidy, the community will choose to donate ____ total units of Q with a deadweight lost of ____ ?
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter17: Externalities And The Environment
Section: Chapter Questions
Problem 6QFR
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Consider a public goods problem. Assume a community has 10 people each with: MBP = 10 – Q, where Q is equal to the quantity of the public good provided in the community. Assume no externality in public good production: MCP = MCS = 10. Assume a rich philanthropist offers to pay half the cost of every voluntary donation. Given this subsidy, the community will choose to donate ____ total units of Q with a deadweight lost of ____ ?
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