public good. Each individual has an identical preference about the mosquito control, given by MB = 50-G, where MB is their marginal benefit from mosquito control and G is the quantity of mosquito control. If the cost of mosquito control is $250 per unit then the socially optimal level of mosquito control is units. (Answe up to 2 decimal places.)

public good. Each individual has an identical preference about the mosquito control, given by MB = 50-G, where MB is their marginal benefit from mosquito control and G is the quantity of mosquito control. If the cost of mosquito control is $250 per unit then the socially optimal level of mosquito control is units. (Answe up to 2 decimal places.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the (inverse) daily demand for oil is given by P = 130 – Q, where o denotes millions of barrels of oil and P is the price per barrel of oil. The marginal private cost of extracting oil is given by MPC = 10 + 2Q. Oil extraction gives rise to environmental pollution, such that the marginal social cost of extracting oil is given by MSC = 10 + 3Q. (a) Find the daily proMuction and price of oil if the market for oil extraction is perfectly competitive. (b) Find the socially optimal production and price of oil and explain why it differs from the market outcome in (a). (c) Find the daily production and price of oil if there is a monopoly oil company and comment on your answer.
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