On the basis of the three individual demand schedules below, and assuming these three people are the only ones in the society,
determine (a) the market demand schedule on the assumption that the good is a private good, and (b) the collective demand schedule
on the assumption that the good is a public good,
Instructions Enter only whole numbers in the table below,
Individual
Individual
Individuale
Demand Curve
Private Good
Price
94
Price
10
Price
Od
Demand Curve.
Public Good
Amount Society is
Willing to Pay
1 10
Od
116
9d
1
>
3
14
04
1
14
12
12
Price
$16
14
12
10
14
12
10
1
2
1
2
1
2
10
10
4
5
4
4
4
6
5
6
5
4
5
4
4
4
2
2
7
2
2
Answers
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Answer:
Private good, top to bottom: P = $8, Q = 1; P = $7, Q = 2; P = $6, Q = 4; P = $5, Q = 7; P = $4, Q = 10; P = $3, Q = 13; P = $2, Q = 16; P = $1, Q = 19. (b) Public good, top to bottom; P = $19, Q = 1; P = $16, Q = 2; P = $13, Q = 3; P = $10, Q = 4; P = $7, Q = 5; P = $4, Q = 6; P = $2, Q = 7; P = $1, Q = 8. The first schedule represents a horizontal summation of the individual demand curves; the second schedule represents a vertical summation of these curves. The market demand curve for the private good will...
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