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Author Question: Why is the market demand curve for public goods calculated as a vertical summation of individual ... (Read 90 times)

Capo

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on: Jun 29, 2018
Why is the market demand curve for public goods calculated as a vertical summation of individual demand curves?
 
  What will be an ideal response?

Question 2

Refer to Figure 6-1. A perfectly inelastic demand curve is shown in
 
  A) Panel A. B) Panel B. C) Panel C. D) Panel D.


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okolip

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Public goods are non-rival and non-excludable. Everyone consumes the same quantity of a public good. The market demand for public goods is derived by summing individual demand curves vertically. Individual demand curves need to be summed vertically because this shows the amount of money consumers are willing to pay for each level of the public good.

Answer to Question 2

A


Capo

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

upturnedfurball

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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