Suppose residents of Toadhop live on the Quabache River, a river prone to flooding. Suppose there are 1000 (type A) people who value flood control more than the 1000 (type B) people. Type A Demand QD = 100 ? P Type B Demand QD = 50 ? P Where Q measures the quality of flood control. If the price of a unit of flood control is $100000 and the citizens of Toadhop gather for a townhall meeting to
find the socially optimal level of flood control, and they are successful, how much will each type A individual contribute in total?
a. 1875
b. 1500
c. 875
d. 625
a
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