rket for good Q is perfectly competitive. However, it features positive externalities. ners' marginal private benefit is MB = 100-Q ers' marginal cost is MC = Q. sumption of this good generates a marginal external benefit MEB=2. e equilibrium of this market, the perfect competition quantity is QPC=
rket for good Q is perfectly competitive. However, it features positive externalities. ners' marginal private benefit is MB = 100-Q ers' marginal cost is MC = Q. sumption of this good generates a marginal external benefit MEB=2. e equilibrium of this market, the perfect competition quantity is QPC=
Chapter1: Making Economics Decisions
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![QUESTION 9
The market for good Q is perfectly competitive. However, it features positive externalities.
Consumers' marginal private benefit is MB = 100-Q
Producers' marginal cost is MC = Q.
The consumption of this good generates a marginal external benefit MEB=2.
a) In the equilibrium of this market, the perfect competition quantity is QPC=
b) The socially efficient quantity is QSOC=
c) To achieve efficiency, the government can introduce a](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F250f1121-2ee3-42ba-abe5-f19bba20f3e7%2F8a4eb37d-e1fe-413e-bf4d-782dfc08449f%2Fiydwdel_processed.png&w=3840&q=75)
Transcribed Image Text:QUESTION 9
The market for good Q is perfectly competitive. However, it features positive externalities.
Consumers' marginal private benefit is MB = 100-Q
Producers' marginal cost is MC = Q.
The consumption of this good generates a marginal external benefit MEB=2.
a) In the equilibrium of this market, the perfect competition quantity is QPC=
b) The socially efficient quantity is QSOC=
c) To achieve efficiency, the government can introduce a
Expert Solution
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Step 1
The equilibrium output occurs where the demand and supply are equal. The equilibrium condition :
MB = MC.
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