Answer
Market demand schedule for public good:
At Q=1, P = 19
At Q=2, P = 16
At Q=3, P = 13
At Q=4, P = 10
At Q=5, P = 7
At Q=6, P = 4
At Q=7, P = 2
At Q=8, P = 1
Optimum quantity = 4
Work Step by Step
Market demand schedule for public good(add prices of the same quantity):
At Q=1, P = 8 + 6 + 5 = 19
At Q=2, P = 7 + 5 + 4 = 16
At Q=3, P = 6 + 4 + 3 = 13
At Q=4, P = 5 + 3 + 2 = 10
At Q=5, P = 4 + 2 + 1 = 7
At Q=6, P = 3 + 1 = 4
At Q=7, P = 2
At Q=8, P = 1
Since at P=4, the quantity supplied is equal to the quantity demanded at 4, the optimum quantity is 4.
