Public Economics - Socially optimal output by ClassOf1

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									              Sub: Economics                                                                  Topic: Public Economics



              Question:
              Examine socially optimal output in public good.
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              If hamburger were a public good: (non rival; and non excludable; far fetched safe food as the
              public good; if food is relatively safe for one, it is relatively safe for all- the reason that
              governments regulate food safety. 0

              Bill’s demand: Q = 20-2P

              Ted’s demand: Q = 10-P

              Social Marginal benefit of hamburger consumption.

              Bill’s WTP; (inverse of demand function: P = 10-0.5Q

              Ted’s WTP;                                       P =
								
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