Fee under monopoly ocba it can not be paid by

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Unformatted text preview: n not be paid by individual with small WTP Outcome is suboptimal A Ds B O C D2L D1L Clubs and congestion Clubs Clubs- organizations that form to provide excludable goods with Non rivalry Non Congestion- utility declines with number of users B(N,X) Benefits depend on amenity size X and number of users B(N,X) N. d B(N,X) /dN<0 d B(N,X) /dX>0 c(X) Cost increases with X c(X) If costs are shared a member choice is If MAX B(N,X)-c(X)/N which is equivalent to Max N* B(N,X)-c(X) Clubs:Optimal size (N and X) Clubs:Optimal Social Optimality problem MAX NB( N .X ) − c( X ) X, N Optimal decision rules N ...
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