Marginal cost of production

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Reference no: EM13912828

Suppose that Dexter and Amy live in 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 = 20 - Q while Amy's (inverse) demand curve is given by P = 10 - 0.25Q. The marginal cost of producing the public good is constant at $2. What is the community's willingness to pay for the 24th unit of the public good?

a. $0

b. $2

c. $6

d. $15

e. None of the answers is correct.

Reference no: EM13912828

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