Alex, Drake, and Sam are the only buyers in the market for a private good. Answer the following questions based on the MC and MWTP functions given below.
= 25 + 0.25
MWTPA = 100 – Q
MWTPB = 210 – 2.1Q
MWTPC = 240 – 2.4Q
What is the aggregate marginal willingness-to-pay equation? Leave 3 decimal places in all values.
Show the aggregate MWTP and MC functions in the same graph. Find the socially efficient price and quantity and show these in your graph. Round price to 2 decimal places. Round quantity to a whole number.
If the socially efficient quantity was exchanged in this market, what would be the net value? Use price rounded to 2 decimals and quantity rounded to a whole number to find net value.
