Purchase Solution

Market demand on the assumption that goods are private

Not what you're looking for?

Ask Custom Question

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.

See attached file for full problem description.

Attachments
Purchase this Solution
Solution Summary

The difference when summing the demands for a private good and for a public good is reinforced.

Solution Preview

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 ...

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

View More Free Quizzes
Related BrainMass Solutions

  • Industry analysis

    The theoretical idea that trade benefits all is partly based on the assumption that externalities do not exist because prices reflect the true costs of production (i.e. the costs have been 'internalized').

  • Public Policy Structure

    629420 Public Policy Structure What is a free market system? What are the basic assumptions that a free market system is based on? What are the erroneous assumptions that the free market is based on? Why are they thought to be erroneous?

  • Discussion on Supply and Demand and Private and Public Goods

    How is the market supply curve derived from the supply curves of individual producers? - Identify what the major determinants of price elasticity of demand are?

  • private goods, public goods, natural monopolies, and open-access goods

    In such a case, the government might intervene because it believes that education is a public good and that a private market will provide too little education. The government wants to make sure that everyone is educated, not just the rich.

  • Oil/Petroleum industry's price elasticity of supply and demand

    Petrol are private goods having both the characteristics of rivalry and excludable.

  • Public and Private Goods

    The expert discusses whether the service that your agency delivers in public or private goods. The market demand and supply for labor are determined.

  • Private and Public Goods and Optimal Output

    How the market is effected by overproducing and underproducing private and public goods are determined.

  • Product Decision Making

    It is based on supply and demand. When the demand for the goods and services goes up, those who are willing to pay for the goods and services are typically the first to get the goods and services.

  • Understanding different market structures.

    Compare and contrast public goods, private goods, common resources, and natural monopolies. b. Explain how labor market equilibrium is affected by the supply and demand of labor. c.

View More Related Solutions