Q. 1hi, could you help me for the whole of qn 3? thanks a lot!! 3. Suppose 3 consumers, A, B and C, of a public good have standing (i.e. is the "society"). Eachconsumer is asked to pay for 1/3 of a public good at a price of P/3.Price, PSocial Demand (i.e. vertical sum of DA + DB + Dc)SMCD.D,H.P/3Q*Quantity, Qa. Suppose A can consume at A's preferred quantity of Q, identify A's consumersurplus in the figure.b. Suppose now that A is forced to consume at point Q* where the aggregate marginalsocial benefit equals the marginal cost. How has A's consumer surplus changed?C. Similarly, what is the change in consumer surplus for B and C?d. Once again, consider society consuming at Q. Would it make sense to expandoutput to Q* using Pareto's rule and the Kaldor-Hicks rule?(Hint: Area S = Net gains of B and C-loss to A)

Given information in graph Three consumers A, Consumer B and Consumer C are consuming public good.…

Suppose 3 consumers, A, B and C, of a public good have standing (i.e. is the "society"). Ea consumer is asked to pay for 1/3 of a public good at a price of P/3. Price, P Social Demand (i.e. vertical sum of DA+ DB + Dc) S MC

Suppose 3 consumers, A, B and C, of a public good have standing (i.e. is the "society"). Ea consumer is asked to pay for 1/3 of a public good at a price of P/3. Price, P Social Demand (i.e. vertical sum of DA+ DB + Dc) S MC

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q. 1 hi, could you help me for the whole of qn 3? thanks a lot!!

3. Suppose 3 consumers, A, B and C, of a public good have standing (i.e. is the "society"). Each
consumer is asked to pay for 1/3 of a public good at a price of P/3.
Price, P
Social Demand (i.e. vertical sum of DA + DB + Dc)
S
MC
D.
D,
H.
P/3
Q*
Quantity, Q
a. Suppose A can consume at A's preferred quantity of Q, identify A's consumer
surplus in the figure.
b. Suppose now that A is forced to consume at point Q* where the aggregate marginal
social benefit equals the marginal cost. How has A's consumer surplus changed?
C. Similarly, what is the change in consumer surplus for B and C?
d. Once again, consider society consuming at Q. Would it make sense to expand
output to Q* using Pareto's rule and the Kaldor-Hicks rule?
(Hint: Area S = Net gains of B and C-loss to A)

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