Negative Externalities----What Kind of Effect Does It Create MSC and MPC b-What kind of an effect does it have in the market equilibrium that gets established? c-How does the q * compare with the q that is a social optimum. Which social optimum ensuring condition is violated as a result of externalities(negative or positive)
a-Negative Externalities----What Kind of Effect Does It Create MSC and MPC
b-What kind of an effect does it have in the
c-How does the q * compare with the q that is a social optimum. Which social optimum ensuring condition is violated as a result of externalities(negative or positive)
d-What about a monopoly? How does market power change the relationship between MC and the aggregate benefit curve? What do we need to assume about the firms to make sure that this condition does not hold? How is that related to the elasticity calculation we made for the market
e- How does the q* under monopoly compare with the q that would give us the social optimum. How is it related to the incentive structure for a monopoly?
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