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Anna, Elsa, and Olaf are trying to decide how many hours per week to run the heater, which costs $30 per hour, in the castle where they all live together. Anna and Elsa's inc demand curves for hours of heat per week are given below: Anna: P = 45 - ½Q Elsa: P = 30 – 1/3Q

Anna, Elsa, and Olaf are trying to decide how many hours per week to run the heater, which costs $30 per hour, in the castle where they all live together. Anna and Elsa's inc demand curves for hours of heat per week are given below: Anna: P = 45 - ½Q Elsa: P = 30 – 1/3Q

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Anna, Elsa, and Olaf are trying to decide how many hours per week to run the heater, which costs $30 per hour, in the castle where they all live together. Anna and Elsa's individual demand curves for hours of heat per week are given below: Anna: P = = 45 – ½Q Elsa: P = 30 –- 1/3Q Anna, Elsa, and Olaf can all agree that they don't value more than 90 hours of heat per week.
Transcribed Image Text:Anna, Elsa, and Olaf are trying to decide how many hours per week to run the heater, which costs $30 per hour, in the castle where they all live together. Anna and Elsa's individual demand curves for hours of heat per week are given below: Anna: P = = 45 – ½Q Elsa: P = 30 –- 1/3Q Anna, Elsa, and Olaf can all agree that they don't value more than 90 hours of heat per week.
Would Elsa prefer to free-ride on Anna's provision of heat or pay her Lindahl price at the socially optimal quantity? Justify your answer and show all calculations.
Transcribed Image Text:Would Elsa prefer to free-ride on Anna's provision of heat or pay her Lindahl price at the socially optimal quantity? Justify your answer and show all calculations.
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