• 2021-04-14
    Sandy derives utility from consuming 'all other goods,' g, and clean air (measured by particulate matter removed per m3), a, as measured by the utility function U(g,a) = g0.6a0.4. The price of 'all other goods' is $20 and the price of clean air (abatement) equals $10. Brian is the only other consumer in the market for clean air and demands 10 units of clean air. What is the market demand for clean air?