The residents of the town Ectenia all low economics, and the mayor proposes building an economics museum. The museum has a fixed cost of $2,400,000 and no variable costs. There are 100,000 town residents, and each has the same demand for museum visits: QD = 10 - P, where P is the price of admission.
a. Graph the museum's average-total-cost curve and its marginal-cost curve. What kind of market would describe the museum?
b. The mayor proposes financing the museum with a lump-sum tax of $24 and then opening the museum to the public for free. How many times would each person visit? Calculate the benefit each person would got from the museum, measured as consumer surplus minus the new tax.