Answer:

Market Demand Function for Streetlights for 25 Households

The market demand function for streetlights for 25 households can be found by summing the demand functions for the 20 households with the demand function Q = 2 – 0.001P and the 5 households with the demand function Q = 3 – 0.002P. This yields a market demand function of Q = 25 – 0.003P.

Equilibrium Price and Number of Streetlights in the Community

The equilibrium price and number of streetlights in the community can be found by setting the market demand function equal to the marginal cost of streetlights and solving for P. This yields an equilibrium price of P = 15,000 and an equilibrium number of streetlights of Q = 25.

Number of Streetlights Purchased for Community in Equilibrium

Assuming a community association has decided to coordinate the streetlight purchase decision problem, the number of streetlights purchased for the community in equilibrium can be found by setting the sum of individual households’ contributions equal to the marginal cost of streetlights and solving for Q. This yields an equilibrium number of streetlights of Q = 15.

Related Questions

  • What is the demand function for streetlights for 20 households?
  • What is the demand function for streetlights for 5 households?
  • What is the market demand function for streetlights for 25 households?
  • What is the marginal cost of streetlights?
  • What is the equilibrium price and number of streetlights in the community?
  • What is the sum of individual households’ contributions?
  • How many streetlights are purchased for the community in equilibrium?
  • What is the cost of building each streetlight?
  • What is the difference between the market demand function for 25 households and the sum of the demand functions for 20 and 5 households?
  • What is the economic impact of the streetlight purchase decision problem on the community?