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Unformatted text preview: files increases. Explain why this implies that the Internet is a common resource. (b) Five Maryland students are interested in downloading a file using the Internet. Suppose that the total cost (including the value of time) of their using the Internet is as follows: Number of Internet Users Total Cost Average Cost Marginal Social Cost----1 10 2 20 3 36 4 60 5 90 Complete the average cost and marginal social cost columns of the table above. (c) How many people would you expect to use the Internet? What is the efficient number of users? (d) Suppose three people are using the Internet. Calculate the total damages the third user imposes on the two users who are already on the Internet. (e) Show that the University could reach the efficient outcome by charging people a $4 fee to download a file. 3. Do Problem 11 on page 411 in the ninth edition of the Parkin text....
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This note was uploaded on 04/03/2010 for the course ECON 2407 taught by Professor H.terrell during the Fall '09 term at Maryland.
- Fall '09