Suppose that the demand function for a good for two group of consumers( A and B)...

Suppose that the demand function for a good for two group of consumers( A and B) are given by Qa= 12 - 2P and Qb=8- P, respectively, where Q is the per unit quantity demanded. The marginal cost to provide the good is constant at 6.50 per unit. There are no externalities in the market

A. Derive the aggregate demand function and find the socially efficient quantity if the good is a public good . Present the equilibrium graphically.

B. Derive the aggregate demand and find the socially efficient quantity if the good is a private good

Expert Solution

Rahul Sunny answered 2 years ago

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Suppose that the demand function for a good for two group of consumers( A and B)...

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