The graphs below show the willingness to pay curves for Dennis and Cristiano, tw
ID: 1201872 • Letter: T
Question
The graphs below show the willingness to pay curves for Dennis and Cristiano, two crab fishermen who depend on lighthouses for directions at night. Assume that they are the only two people in the economy. Fill in the following table by calculating the collective demand for the given quantity of lighthouses. Suppose the price of a lighthouse is $150, as shown by the horizontal line on the graph below. From the perspective of Dennis and Cristiano, this is the supply curve for lighthouses. Use the blue points (circle symbol) to plot the collective demand curve for lighthouses. Line segments will automatically connect the points. Remember to plot from left to right. Then place a black point (X symbol) on the graph to indicate the optimal quantity of lighthouses.Explanation / Answer
Quantity Dennis's WTP Cristiano's WTP Collective WTP 1 80 90 170 2 70 80 150 3 60 70 130 4 50 60 110 5 40 50 90
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