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

For private goods, individual demands are summed horizontally because each unit is consumed individually. For public goods, demands are summed vertically because the good is consumed collectively, and the total willingness to pay is the sum of individual valuations.

Which of the Following Statements Is Correct About Measuring Collective