Assume the society consists of three individuals Sue, Jen und Chris

Economics Dec 15, 2020

Assume the society consists of three individuals Sue, Jen und Chris. Their demand functions for the number of streetlights as follows: Qs = 24 - 4p. Q = 48-6p, Qc = 72 - 12p, i) Determine whether the streetlight is public good? Explain ii) If the marginal cost of providing streetlight is constant at $8, how many streetlights should be provided so that the provision of this public good is pareto efficient? iii) How much each individual is willing to pay at the equilibrium level of streetlights?

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