Market demand on the assumption that goods are private
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On the basis of three individual demand schedules on the next page, and assuming these three people are the only ones in the society, determine (a) the market demand 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. Explain the differences, if any, in your schedules.
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Solution Summary
The difference when summing the demands for a private good and for a public good is reinforced.
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Please see the attached file.
On the basis of three individual demand schedules on the next page, and assuming these three people are the only ones in the society, determine (a) the market demand 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. Explain the differences, if any, in your schedules.
Individual 1 Individual 2 Individual 3
P$ Qd P$ Qd P$ Qd
8 0 8 1 8 0
7 0 7 2 7 0
6 0 6 3 6 1
5 1 5 4 5 2
4 2 4 5 4 3
3 3 3 6 3 4
2 4 2 7 2 5
1 5 1 8 1 6
The difference when summing the demands for a private good and for a public good is that, when summing for a private good, we need to sum the quantities demand ...
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