On the basis of the three individual demand schedules below, and assuming these three people are the only ones in the society, determine (a) the market demand schedule on the assumption that the good is a private good and (b) the collective demand schedule on the assumption that the good is a public good.

Individual 1

Individual 2

Individual 3

Private demand

Public Demand

Price

Qty

Price

Qty

Price

Qty

Price

Qty

Price society is willing to pay

Qty

$8

1

$8

1

$8

1

$8

1

7

2

7

2

7

2

7

2

6

3

6

3

6

3

6

3

5

4

5

4

5

4

5

4

4

5

4

5

4

5

4

5

3

6

3

6

3

6

3

6

2

7

2

7

2

7

2

7

1

8

1

8

1

8

1

8

Question

On the basis of the three individual demand schedules below, and assuming these three people are the only ones in the society, determine (a) the market demand schedule on the assumption that the good is a private good and (b) the collective demand schedule on the assumption that the good is a public good. 




Individual 1


Individual 2


Individual 3


Private demand


Public Demand




Price


Qty


Price


Qty


Price


Qty


Price 


Qty


Price society is willing to pay


Qty




$8


1


$8


1


$8


1


$8


 


 


1




7


2


7


2


7


2


7


 


 


2




6


3


6


3


6


3


6


 


 


3




5


4


5


4


5


4


5


 


 


4




4


5


4


5


4


5


4


 


 


5




3


6


3


6


3


6


3


 


 


6




2


7


2


7


2


7


2


 


 


7




1


8


1


8


1


8


1


 


 


8

Price per cup	Quantity demanded (cups)	Quantity supplied (cups)
$9	2	10
$7	4	8
$5	6	6
$3	8	4
$1	10	2

Price per cup	Quantity Demanded (Cups)	Quantity Supplied (Cups)
$9	2	10
$7	4	8
$5	6	6
$3	8	4
$1	10	2

Individual 1		Individual 2		Individual 3		Private demand		Public Demand
Price	Qty	Price	Qty	Price	Qty	Price	Qty	Price society is willing to pay	Qty
$8	1	$8	1	$8	1	$8			1
7	2	7	2	7	2	7			2
6	3	6	3	6	3	6			3
5	4	5	4	5	4	5			4
4	5	4	5	4	5	4			5
3	6	3	6	3	6	3			6
2	7	2	7	2	7	2			7
1	8	1	8	1	8	1			8

Individual 1

Individual 2

Individual 3

Private demand

Public Demand

Price

Qty

Price

Qty

Price

Qty

Price

Qty

Price society is willing to pay

Qty

$8

1

$8

1

$8

1

$8

1

7

2

7

2

7

2

7

2

6

3

6

3

6

3

6

3

5

4

5

4

5

4

5

4

4

5

4

5

4

5

4

5

3

6

3

6

3

6

3

6

2

7

2

7

2

7

2

7

1

8

1

8

1

8

1

8

Unlock all answers