Assume that Ira, Harry, and Joe each value a public community park. They have the following demands where the size of the park Q is determined in thousands of square feet. For example, Harry's maximum value is $150 per year
Pi = 300 - 0.75Q Ira
Ph = 150 - 0.5Q Harry
Pj= 80 - 0.4Q Joe
The marginal cost of the park is $100 per 1000 square feet.
1. Determine the optimum amount of Q to be provided given the parameters of the demands.
2. Assume that Joe's twin brother Moe moves in, and his preferences are identical to Joe. There are now four people in the problem.
3. Discuss how much will each of the four pay if we impose a "Lindahl solution" to pay for the park?