Suppose Demand for a Public Park (Assume It Is a Pure

question 12

Essay

Suppose demand for a public park (assume it is a pure public good)for two groups of consumers (A and B)is given by:
Q_A = 4 - 0.5P
Q_B = 7 - P
where Q is the number of hectares each group would like to see incorporated into the park.If the marginal cost to provide the park is a constant $3/ha,what is the socially efficient number of hectares for the park?

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Definitions:

Customer Orders

Requests made by customers for the purchase of goods or services offered by a business.

Demand Stability

The condition in which the demand for a product or service does not experience sudden large fluctuations over time.

Learning Within Organizations

Processes or activities through which individuals and groups acquire, share, and apply knowledge and skills to improve organizational effectiveness.

Bullwhip Effect

The phenomenon where small fluctuations in demand at the retail level cause progressively larger fluctuations in demand at the wholesale, distributor, and manufacturer levels.