42. Table 12.12, shows the supply and demandconditions for a firm that will play trumpets on thestreets when requested. Qs, is the quantity suppliedwithout social costs. Qs2 is the quantity supplied withsocial costs. What is the negative externality in thissituation? Identify the equilibrium price and quantitywhen we account only for private costs, and then whenwe account for social costs. How does accounting for theexternality affect the equilibrium price and quantity?PQdQs1Qs2$20108$181.97$152.57.55.5$12464$1053$57.52.50.5Table 12.12

A negative externality is a cost borne by a third party. For instance, the noise of a trumpet gives…

eets when requested. Qs1 is the quantity supplied thout social costs. Qs2 is the quantity supplied with cial costs. What is the negative externality in this uation? Identify the equilibrium price and quantity nen we account only for private costs, and then when e account for social costs. How does accounting for the ternality affect the equilibrium price and quantity? P Qd Qs1 Qs2 520 10 8 $18 9 7 $15 2.5 7.5 5.5 512 4 6 4 $10 3 5 35 7.5 2.5 0.5 1.

eets when requested. Qs1 is the quantity supplied thout social costs. Qs2 is the quantity supplied with cial costs. What is the negative externality in this uation? Identify the equilibrium price and quantity nen we account only for private costs, and then when e account for social costs. How does accounting for the ternality affect the equilibrium price and quantity? P Qd Qs1 Qs2 520 10 8 $18 9 7 $15 2.5 7.5 5.5 512 4 6 4 $10 3 5 35 7.5 2.5 0.5 1.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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