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    3 people enjoy seeing fireworks:
    Elmer's demand: P = 20 - Q
    Ethel's demand: P = 10 - 0.6Q
    Edith's demand: P = 10 - 0.4Q

    Fireworks displays are a public good i.e. non-rival ad non-excludable. Fireworks are produced and sold competitively at a constant marginal cost = average cost = £18 per firework

    1) The town mayor decides to maximize the social welfare associated with fireworks He puts on a display with:
    a) 0 fireworks
    b. 1 firework
    c. 2 fireworks
    d. 4 fireworks
    e. 10 fireworks
    f. 11 fireworks
    g. 12 fireworks
    h. 14 fireworks
    i. none of the above

    2) If the town mayor puts on a display that maximises the scial welfare associated with fireworks, total social surplus (in £) will be given by:
    a. 0
    b. 2
    c. 4
    d. 40
    e. 76
    f. 121
    g. 198
    h. 400
    i. none of the above

    3) say the town mayor does not put on a public fireworks display, and each citizen buys fireworks themselves, maximising their own individual utility. the town will end seeing a total of:
    a. 0 fireworks
    b. 1 firework
    c. 2 fireworks
    e. 10 fireworks
    f. 11 fireworks
    g. 12 fireworks
    h. 14 fireworks
    i. none of the above

    4) say the town mayor does not put on a public fireworks displau and each citizen buys fireworks themselves, maximising their own individual utility. the town's total consumer surplus (in £) from the resulting display of fireworks will be given by:
    a. 0
    b. 2
    c. 4
    d. 40
    e. 76
    f. 121
    g. 198
    h. 400
    i. none of the above
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    draw a graph

    what is special about this kind of good that allows you to sum the demand curves differently from private goods?
 
 
 
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