Since a public good is enjoyed by all members of society, willingness to pay for the good will not diminish as the amount produced increases. Evaluate and use an example using your original thought and words to support your answer.
Since a public good is enjoyed by all members of society, willingness to pay for the good will not diminish as the amount produced increases. Evaluate and use an example using your original thought and words to support your answer.
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Based on the three individual demand schedules below, and assuming these three people are the only ones in the society, determine the collective demand schedule on the assumption that the good is a public good. Responses go in the Amount society is willing to pay sections.
Individual 1 Individual 2 Individual 3 Public Demand
| Price | Qd | Price | Qd | Price | Qd | Amount society is willing to pay | Qd |
| $8 | 1 | $8 | 0 | $8 | 1 | ? | 1 |
| 7 | 2 | 7 | 0 | 7 | 2 | ? | 2 |
| 6 | 3 | 6 | 0 | 6 | 3 | ? | 3 |
| 5 | 4 | 5 | 1 | 5 | 4 | ? | 4 |
| 4 | 5 | 4 | 2 | 4 | 5 | ? | 5 |
| 3 | 6 | 3 | 3 | 3 | 6 | ? | 6 |
| 2 | 7 | 2 | 4 | 2 | 7 | ? | 7 |
| 1 | 8 | 1 | 5 | 1 | 8 | ? | 8 |
Use the public demand schedule above and the following supply schedule to ascertain the optimal quantity of this public good.
| Price | Quantity Supplied |
| $22 | 10 |
| 21 | 8 |
| 20 | 6 |
| 19 | 4 |
| 18 | 2 |
| 17 | 0 |
Instructions: Enter your answer as a whole number.
Optimal quantity = ______?
