Answer the Question Based on the Following Information for a Public

question 59

Multiple Choice

Answer the question based on the following information for a public good. Pₐ and Pᵦ are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it. These people are the only two members of society. If this good were a private good instead of a public one, the total quantity demanded at a $3 market price would be

• A)2 units.
• B)3 units.
• C)6 units.
• D)4 units.

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Definitions:

Sales Forecast

An estimate of the sales volumes, and often revenues, that a company expects to achieve within a specific period.

Unit Sales

The total number of individual items sold in a given period.

Value-Based Pricing

A pricing strategy where the price of a product or service is determined primarily by the perceived value to the customer rather than the cost of production.

Useful Life

The expected period of time during which an asset is useful to the owner for the purpose for which it was acquired, often impacting depreciation calculations.