The cost (supply) of each "unit" of NPR (National Public Radio) is P=9, Derek's valuation for each unit of NPR (demand) is given by Pp=20-2Q, and Kim's valuation is given by Pk=10-Q. The social valuation of NPR is Ps= Q. The socially optimal amount of NPR is units. Without intervention, the private market would lead to an • of NPR. Suppose the government decides to subsidize NPR in order to achieve the socially optimal amount of NPR. The total demand function is Q= P.

The cost (supply) of each "unit" of NPR (National Public Radio) is P=9, Derek's valuation for each unit of NPR (demand) is given by Pp=20-2Q, and Kim's valuation is given by Pk=10-Q. The social valuation of NPR is Ps= Q. The socially optimal amount of NPR is units. Without intervention, the private market would lead to an • of NPR. Suppose the government decides to subsidize NPR in order to achieve the socially optimal amount of NPR. The total demand function is Q= P.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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