Two Individual Demand Curves for Some Public Good
some public good     The graph to the right shows two individual demand curves for some public good. Person 1 (D1) values 1 unit of the public good at almost 2 and person 2 (D2) values one unit at 5. The total value placed on one unit is 7.

    Person 1 values a 7th unit at 1 and person 2 values a 7th unit at 3 so the total value of a 7th is 4. Vertically adding up the marginal values placed on each unit gives us the market demand for the public good, DP.

  It is because of the non-rivalness of public goods that we add up demand this way. The amount we should spend on supplying a public good is the sum of the values of all those who would enjoy the good.

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