Geoffrey is a new employee at the Boston Consulting Group where his first assignment is to work on a project that is designed to help improve the education system in Boston. As his first task on the project, Geoffrey begins by analyzing the market for education in Boston and he finds that the Social Marginal Cost (SMC) function in the educational market in Boston is equal to: SMC = 20 +2Q. Next, Geoffrey uses data obtained from Boston population that attended the educational system to find the Private Marginal Benefit (PMB) function in this market; the equation for PMB 200-2Q where Q represents the units of education that city of Boston produces. Upon additional analysis of the data, Geoffrey learns that each unit of education provides an external benefit to society equal to $20 per unit. Geoffrey also knows that the current market for education in Boston does not internalize the external benefit. Given all that Geoffrey has learned about the market for education in Boston, he calculates the deadweight loss in this market using the skills he learned in Econ 101. What is the deadweight loss in this market that Geoffrey finds? (please enter just the number and not the $ symbol)

Geoffrey is a new employee at the Boston Consulting Group where his first assignment is to work on a project that is designed to help improve the education system in Boston. As his first task on the project, Geoffrey begins by analyzing the market for education in Boston and he finds that the Social Marginal Cost (SMC) function in the educational market in Boston is equal to: SMC = 20 +2Q. Next, Geoffrey uses data obtained from Boston population that attended the educational system to find the Private Marginal Benefit (PMB) function in this market; the equation for PMB 200-2Q where Q represents the units of education that city of Boston produces. Upon additional analysis of the data, Geoffrey learns that each unit of education provides an external benefit to society equal to $20 per unit. Geoffrey also knows that the current market for education in Boston does not internalize the external benefit. Given all that Geoffrey has learned about the market for education in Boston, he calculates the deadweight loss in this market using the skills he learned in Econ 101. What is the deadweight loss in this market that Geoffrey finds? (please enter just the number and not the $ symbol)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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