Paper instructions:

Q2. Private Goods: The graph below presents the demand curves for a private good in a two-person economy. The red dots depict the first individual’s demand for this private good, while the purple boxes depict the second individual’s demand for the good. (10 pts) Fill in the blanks on the right-hand-side table below to describe the market demand curve for this private good. (8 pts) Given the constructed table, carefully draw on the diagram the market demand curve. $ 14 13 Market Demand Curve P Q 12 11 9 10 00 7 9′ 8 6 7 5 6 4 5 3 4 2 1 3 2. 0 1 0 11 13 15 1 2 3 4 5 6 7 8 9 10 Q (8 pts) Suppose the market supply curve for this private good is perfectly elastic (a horizontal line) at $3. Draw the market supply curve on the diagram. What are the equilibrium price and quantity (P* and Q*)? Answer: p*= $ Q* = units

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What are the Equilibrium Price and Quantity (P* and Q*)? Answer: p*= $ Q* = Units.
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