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Total Demand for Private Goods vs Public Goods. Consider the following individual demand functions: Q1 = 10 – P               Q2...

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Economics

Total Demand for Private Goods vs PublicGoods.

Consider the following individual demand functions:

Q1 = 10 –P              Q2 = 8 –P                 Q3 = 7 - P

Rival & Excludable

  1. Complete the following table assuming the product is rival andexcludable:

Price ($) WTP

Q1

Q2

Q3

Total Demand

$10

9

8

7

6

5

4

3

2

1

0

WTP= willing to pay

Nonrival & Nonexcludable

  1. If the above product becomes a public good, calculate the totaldemand for the product and complete the following table:

Quantity Demanded

Price (WTP)

1

2

3

4

5

6

7

8

9

10

11

Answer & Explanation Solved by verified expert
4.1 Ratings (497 Votes)
Q1 10P Q2 8P Q3 7P When good is rival excludable this means that the good is private good Then the market demand is calculated by summing the individual demand at particular price    See Answer
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