Which of the following statements is correct about measuring collective demand for public and private goods?
A) Public good demand is found by horizontally adding individual demand curves;private good demand is found by vertically adding individual demand curves.
B) Private good demand is found by horizontally adding individual demand curves;public good demand is found by vertically adding individual demand curves.
C) Both public and private good demand are found by horizontally adding individual demand curves.
D) Both public and private good demand are found by vertically adding individual demand curves.

Question

Quizplus · Accepted Answer

The correct method for measuring collective demand for private goods is to horizontally add individual demand curves because each individual's demand is independent and not affected by the demand of others. In contrast, public good demand is found by vertically adding individual demand curves because one individual's demand affects the total amount of the public good that will be provided, and therefore affects the demand of others.

Which of the Following Statements Is Correct About Measuring Collective