Public Goods Provision. Consider three consumers indexed by i ∈{1,2,3) with the following demand functions for a public good G. p1=20-1/10G, p2=20-1/10G, p3=30-2/10G
Where p1 is the price consumer i is willing to pay for a quantity of G
- If marginal cost is 70, what is the optimum level of public good?
- If marginal cost is 20, what is the equilibrium level of public good provided by the market?(you need to vertically sum the demand curves here)