Socially Optimal Level Assignment | Homework For You

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December 9th, 2019

Mosquito control is non-rival and non-excludable. Suppose the economy consists of two people who are identical and have the following inverse demand for mosquito control:P = 50 – y

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where y is the quantity of control. The cost of mosquito control is $20 per unit.

a. What is the socially optimal level of mosquito control?

b. Suppose that the government does not provide mosquito control. How much mosquito control would individual 1 provide if she believes that individual 2 will not provide any control? How much would she provide if she believes individual 1 will provide 10? How much if she believes individual 2 will provide 30 units? Get Economics homework help today

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