microeconomics The demand functions of individual A and B for a public good (G) is given by:PA = 500-2G&PB = 200 -0.8Gwhere, P = price offered by each individual (RM) and G = units of public goods. Suppose themarginal cost (MC) to produce G is constant, RM250.a. Derive the aggregate demand equation for the above public good. b. Sketch all the information provided above in the diagram below. [Note: Show all the demandand marginal cost functions in detail]Harga / Price800600400200O100200300Kuantiti / QuantityG* =c. Calculate the total quantity of public goods produced assuming no free riders are present(G*). Show this result in the above diagram.unit(s)

Public good has two features : Non Rival and Non-excludable. the consumption of public good by one…

The demand functions of individual A and B for a public good (G) is given by: PA = 500-2G & PB = 200- 0.8G where, P = price offered by each individual (RM) and G = units of public goods. Suppose the marginal cost (MC) to produce G is constant, RM250. 1. Derive the aggregate demand equation for the above public good.

The demand functions of individual A and B for a public good (G) is given by: PA = 500-2G & PB = 200- 0.8G where, P = price offered by each individual (RM) and G = units of public goods. Suppose the marginal cost (MC) to produce G is constant, RM250. 1. Derive the aggregate demand equation for the above public good.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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