Question

The table below provides information on the prices Pajor and Brennan are willing to pay for various quantities of a public good. These two people are the only members of society. Determine the price that society is willing to pay for the public good at each quantity of output.

Pajor Brennan
Society
P Qd P Qd P Qd
$36.00 1 $36.00 0 $ 1
31.00 2 31.00 0 2
26.00 3 26.00 1 3
21.00 4 21.00 2 4
16.00 5 16.00 3 5
11.00 6 11.00 4 6
6.00 7 6.00 5 7
1.00 8 1.00 6 8

If the government’s marginal cost of providing this public good is constant at $42, how many units of the public good should government provide?