What quantity of the public good would be produced

Assignment Help Business Economics

Reference no: EM131098650

There are three consumers of a public good. The marginal willingness-to-pay for the consumers are as follows:

consumer 1 :MWP1(Q)=60-Q

Consumer 2: MWP2(Q)=100-Q

consumer 3: MWP(Q)=140-Q

Where MWPi (i=1,2,3) is in dollars per unit and Q is the quantity of the public good. The marginal cost of the public good is $180. a) What is the efficient level of production of the public good? b) If the three consumers were to pay a third of the cost of producing the public good, what quantity of the public good would be produced? What would be the size of the deadweight loss? c) Propose an alternative cost sharing arrangement that leads to the efficient quantity of the public good being produced.

Reference no: EM131098650

Questions Cloud

Find all pure-strategy nash equilibrium : Consider a game in which there is a prize worth $30. There are three contestants, A, B, and C. Each can buy a ticket worth $15 or $30 or not buy a ticket at all. They make these choices simultaneously and independently. Find all pure-strategy Nash eq..

What is the typical site of origin of leptin hormone : What is the typical site of origin of leptin hormone - In a normal person, what is the effect of elevated leptin levels in the bloodstream?

Use mid-point method to calculate price elasticity of demand : The cafe manager estimates that daily demand for cakes is represented by. What price is the cafe currently charging for cakes? The store manager notices that a nearby store is charging $8.50 per cake, and is contemplating whether to match the price. ..

Is likely result institutional or contextual discrimination : If most youth gangs are racially and ethnically homogeneous, should law enforcement use race and ethnic-specific strategies to fight gang formation and control gang crime?

What quantity of the public good would be produced : There are three consumers of a public good. Where MWPi (i=1,2,3) is in dollars per unit and Q is the quantity of the public good. The marginal cost of the public good is $180. What is the efficient level of production of the public good? If the three..

Battle between cyber criminals and law enforcement : The battle between cyber criminals and law enforcement (and information security professionals) the world over is a constant tug-of-war. From most perspectives, law enforcement and INFOSEC personnel are at a significant disadvantage,

What is the marginal product of capital and labor : The manager of a meat-packing plant can use either butchers (labor) or meat saws (capital) to prepare packages of sirloin steak. Based on estimates provided by an efficiency expert, the firm's production function for sirloin steak is given by Q=K+L. ..

Consumer spending have on the aggregate economy : What impact does consumer spending have on the aggregate economy? How is it similar or different from the impact that government spending have on the aggregate economy?

Build gas powered generator that would produce maximum : It would cost the town of Irondale $50 million to build a gas powered generator that would produce a maximum of 5 megawatts of electricity at 15 cents per hour. Another alternative would be for Irondale to build a $100 million coal=fired generator th..

User Account

All Pages