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?
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?
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