- #1
surferbarney0729
- 32
- 0
confused
Andrew, Beth, and Cathy live in Lindhville. Andrew’s demand for bike paths, a public
good, is given by Q = 12 – 2P. Beth’s demand is Q = 18 – P, and Cathy’s is Q = 8 – P/3.
The marginal cost of building a bike path is MC = 21. The town government decides to
use the following procedure for deciding how many paths to build. It asks each resident how many paths they want, and it builds the largest number asked for by any
resident. To pay for these paths, it then taxes Andrew, Beth, and Cathy the prices a, b,
and c per path, respectively, where a + b + c = MC. (The residents know these tax
rates before stating how many paths they want.)
Can anyone help me on how the answers 0,11, and 2.67 where found using the MC being equal to 7?
I am missing something simple and am looking for some help.
Thanks
Andrew, Beth, and Cathy live in Lindhville. Andrew’s demand for bike paths, a public
good, is given by Q = 12 – 2P. Beth’s demand is Q = 18 – P, and Cathy’s is Q = 8 – P/3.
The marginal cost of building a bike path is MC = 21. The town government decides to
use the following procedure for deciding how many paths to build. It asks each resident how many paths they want, and it builds the largest number asked for by any
resident. To pay for these paths, it then taxes Andrew, Beth, and Cathy the prices a, b,
and c per path, respectively, where a + b + c = MC. (The residents know these tax
rates before stating how many paths they want.)
Can anyone help me on how the answers 0,11, and 2.67 where found using the MC being equal to 7?
I am missing something simple and am looking for some help.
Thanks