pubsec-hintsps4 - result you get is only valid up to the...

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BRANDEIS UNIVERSITY Department of Economics Econ 134 Mr. Coiner Public Sector Spring, 2010 Hints for Problem Set 4 On the 2 nd question, which is #11 from Chapter 9, plot the 3 demand curves and take note of their horizontal intercepts (the quantity demanded when the price is zero). These will be 3 different numbers. To get the Social Marginal Benefit curve, add the demand curves vertically. However, the
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Unformatted text preview: result you get is only valid up to the quantity that is the smallest of the 3 horizontal intercepts. Above that quantity, one of the people no longer gets any benefit from the public good, and there would only be 2 demand curves to add. If you continue to add all 3 curves, you will be “adding” a negative benefit for Alfie, which is not correct....
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This note was uploaded on 10/15/2011 for the course ECON 134 taught by Professor Coiner during the Spring '11 term at Brandeis.

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