Suppose Dexter and Amy Are the Only Members of a Community

question 13

Multiple Choice

Suppose Dexter and Amy are the only members of a community that is trying to determine how much of the public good should be produced.Dexter's (inverse) demand curve is given by P = 50 - 5Q,while Amy's (inverse) demand curve is given by P = 150 - 15Q,where P is price or marginal benefit and Q is the quantity of the good.The marginal cost of producing the public good is constant at $80.Dexter will vote for the efficient quantity of the public good if the price to him is:

• A) $20.
• B) $40.
• C) $60.
• D) $80.