Two consumers, M and N, have the following demand curves M: PM = 24 – 2Q N: PN = 48 – 4Q Where PM and PN represent marginal willingness-to-pay values for M and N respectively. Q represents the quantity of output. (a) If M and N are the only consumers in the market and the product is a public good, obtain the market social benefit equation. Draw the two individual private benefits and the marginal social benefit curves in the same diagram. (b) If M and N are the only consumers in the market and the product is a private good, obtain the market demand equation
Two consumers, M and N, have the following demand curves M: PM = 24 – 2Q N: PN = 48 – 4Q Where PM and PN represent marginal willingness-to-pay values for M and N respectively. Q represents the quantity of output. (a) If M and N are the only consumers in the market and the product is a public good, obtain the market social benefit equation. Draw the two individual private benefits and the marginal social benefit curves in the same diagram. (b) If M and N are the only consumers in the market and the product is a private good, obtain the market demand equation
Chapter14: Environmental Economics
Section: Chapter Questions
Problem 3SQ: From an economic viewpoint, the optimal amount of pollution a. is zero because all pollution imposes...
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Two consumers, M and N, have the following
Where PM and PN represent marginal willingness-to-pay values for M and N respectively. Q represents the quantity of output.
(a) If M and N are the only consumers in the market and the product is a public good, obtain the market social benefit equation. Draw the two individual private benefits and the marginal social benefit curves in the same diagram.
(b) If M and N are the only consumers in the market and the product is a private good, obtain the market demand equation
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ISBN:
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Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc