Total Demand for Private Goods vs Public Goods. Consider the following individual demand functions: Q1 = 10 â€“ PÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Q2...

90.2K

Verified Solution

Question

Economics

Total Demand for Private Goods vs PublicGoods.
Consider the following individual demand functions:
Q₁ = 10 â€“PÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Q₂ = 8 â€“PÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Q₃ = 7 - P
Rival & Excludable
Complete the following table assuming the product is rival andexcludable:
Price ($) WTP
Q₁
Q₂
Q₃
Total Demand
$10
9
8
7
6
5
4
3
2
1
0
WTP= willing to pay
Nonrival & Nonexcludable
If the above product becomes a public good, calculate the totaldemand for the product and complete the following table:
Quantity Demanded
Price (WTP)
1
2
3
4
5
6
7
8
9
10
11

Answer & Explanation Solved by verified expert

4.1 Ratings (497 Votes)

Q1 10P Q2 8P Q3 7P When good is rival excludable this means that the good is private good Then the market demand is calculated by summing the individual demand at particular price See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Quantity Demanded	Price (WTP)
1
2
3
4
5
6
7
8
9
10
11