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Duopoly Assignment | Homework For You

Suppose there are only two individuals in society. Person A’s demand curve for bugs control is given by QA =100−P and for person B, the demand curve is given by QB =200−P

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Homework For You

(a) Suppose bugs control is a pure public good; that is, once it is produced, everyone benefits from it. What would be the optimal level of this activity if it could be produced at a constant marginal cost of $120 per unit?

(b) If bugs control were left to the private market, how much might be produced?

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