QUESTION 2 Suppose there are two people: Anna and Bob. Anna\'s demand curve for
ID: 1133788 • Letter: Q
Question
QUESTION 2 Suppose there are two people: Anna and Bob. Anna's demand curve for donuts is P 10 Qa Bob's demand curve for donuts is: P 10 2Qb. Their joint (aggregate) marginal benefit from donuts can be described by the function: MB 20 Their total benefit from 15 donuts is -25 Write your answers in decimals, rounding to two decimal places. Ex DO NOT USE fractions 3 like 1/3 or .3, but instead .33 QUESTION 3 Suppose two bakeries produce donuts. Firm A's supply curve is P curve is: P 20 Qb. Their joint supply curve is: 20 20+ 2Qa. Firm B's supply +.66 Their total cost of producing 30 donuts is: 39.8 Write your answers in decimals. Again -round to two decimal places. QUESTION 4 Suppose there are two people: Anna and Bob. Anna's demand curve for donuts is P 10 Qa Bob's demand curve is: P-10-2Qb. What is the most efficient way to divide up 6 donuts between the two? Anna gets:4 Bob gets:2 donuts. donuts. Click Save and Submit to save and submit. Click Save All Answers to save all answers.Explanation / Answer
Question 2:
Anna’s demand curve : P = 10-Qa.
Qa = 10-P
Bob’s Demand curve : P = 10-2Qb
2Qb = 10-P
Qb = (½)*(10-P) = 5-0.5P
Now Aggregate Demand or joint Marginal Benefit will be: Q = Qa+Qb
Qa+Qb = 10-P+5-0.5P
Q = 15-1.5P
1.5P = 15-Q
P = 15/1.5 – Q/1.5
P = 10 – 0.67Q
Replace P by MB:
MB = 10 - 0.67Q
Total Benefit from 15 Dounuts = 10-0.67*15 = 10-10.05 = -0.05
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