Demand 100 200 300 400 500 a. How many units of good are produced at the market equilibrium? b. How much is the external cot for each unit of good produced? c. How many units of good should be produced at the social optimum? d. In order to reach the social optimum, what should the government do? 4.

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter5: Difficult Cases For The Market And The Role Of Government
Section: Chapter Questions
Problem 5CQ
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Question
32
28
Social Cost
24
20
Private Cost
16
12
8
Demand
4
100
200
300
400
500
a. How many units of good are produced at the market equilibrium3
b. How much is the external cot for each unit of good produced?
c. How many units of good should be produced at the social optimum?
d. In order to reach the social optimum, what should the government do?
Transcribed Image Text:32 28 Social Cost 24 20 Private Cost 16 12 8 Demand 4 100 200 300 400 500 a. How many units of good are produced at the market equilibrium3 b. How much is the external cot for each unit of good produced? c. How many units of good should be produced at the social optimum? d. In order to reach the social optimum, what should the government do?
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