The demand curve for public goods is different than the demand curve for private goods.

Concept #1: Demand Curve of a Private Good

Concept #2: Demand Curve of a Public Good

Practice: The benefit of an additional unit of a public good is:

Practice: If the benefit of a public good does not exceed its cost:

Practice: To find the benefit of an additional unit of a public good, we sum the individual demand curves:

Practice: Two roommates plan to spend their evening with a marathon of Saw horror movies. Because it is a marathon, they must start with the first movie in the series and continue in order. Their willingness to pay for the rental of each movie is as follows: The marginal benefit from renting the third movie is: 

Practice: Two roommates plan to spend their evening with a marathon of Saw horror movies. Because it is a marathon, they must start with the first movie in the series and continue in order. Their willingness to pay for the rental of each movie is as follows: If each movie rental costs $6, how many movies should they rent? 

Practice: Which of the following is not a possible solution to the tragedy of the commons?