Suppose there are three individuals living in a community. Their demands for a public good are described below and they have decided to vote on the level of public good to be provided. The $36 MC is divided equally so each faces a tax price of $12. Would the level of the public good provided via a simple majority vote change if the community became more polarized than before? For example, suppose Doug suddenly develops a demand for the public good MB = 120 - 6Q and Adam develops a demand P = 10 - Q. Does the outcome of simple majority voting after polarization lead te %3! higher, lower, or the same level of public good than before? Doug: MB = 60 - 3Q Carl: MB = 40 - 2Q %3D Adam: MB = 20 - Q %3! O Higher O Lower O Same
Suppose there are three individuals living in a community. Their demands for a public good are described below and they have decided to vote on the level of public good to be provided. The $36 MC is divided equally so each faces a tax price of $12. Would the level of the public good provided via a simple majority vote change if the community became more polarized than before? For example, suppose Doug suddenly develops a demand for the public good MB = 120 - 6Q and Adam develops a demand P = 10 - Q. Does the outcome of simple majority voting after polarization lead te %3! higher, lower, or the same level of public good than before? Doug: MB = 60 - 3Q Carl: MB = 40 - 2Q %3D Adam: MB = 20 - Q %3! O Higher O Lower O Same
Chapter19: Externalities And Public Goods
Section: Chapter Questions
Problem 19.7P
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