Suppose demand for a public park (assume it is a pure public good) for two groups of consumers (A and B) is given by: QA = 4 - 0.5P QB = 7 - P where Q is the number of acres each group would like to see incorporated into the park. If the marginal cost to provide the park is a constant $3/acre, what is the socially efficient number of acres for the park?
Suppose demand for a public park (assume it is a pure public good) for two groups of consumers (A and B) is given by: QA = 4 - 0.5P QB = 7 - P where Q is the number of acres each group would like to see incorporated into the park. If the marginal cost to provide the park is a constant $3/acre, what is the socially efficient number of acres for the park?
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter11: Public Goods And Common Resources
Section: Chapter Questions
Problem 2PA
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Suppose demand for a public park (assume it is a pure public good) for two groups of consumers (A and B) is given by:
QA = 4 - 0.5P
QB = 7 - P
where Q is the number of acres each group would like to see incorporated into the park. If the marginal cost to provide the park is a constant $3/acre, what is the socially efficient number of acres for the park?
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