With the existence of negative externality, determine the socially efficient level of output and price. Suppose that the private marginal cost for a product's (rice) consumption isgiven by the MB curve (or MB = 360 – 4Q) and the private marginal costassociated with its production is given by the MPC curve (or MC = 6Q). Thediagram is presented below.P ($)360*MPC320+280+240+216200+160+120+80+40+MB102030405060708090Q per year

Answered: Image /qna-images/answer/34f08604-01fc-40ce-bbbe-c9a331c7d9dd.jpg

se that the private marginal cost for a product's (rice) consumption is by the MB curve (or MB = 360 – 4Q) and the private marginal cost ated with its production is given by the MPC curve (or MC = 6Q). The am is presented below.

se that the private marginal cost for a product's (rice) consumption is by the MB curve (or MB = 360 – 4Q) and the private marginal cost ated with its production is given by the MPC curve (or MC = 6Q). The am is presented below.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

With the existence of negative externality, determine the socially efficient level of output and price.

Suppose that the private marginal cost for a product's (rice) consumption is
given by the MB curve (or MB = 360 – 4Q) and the private marginal cost
associated with its production is given by the MPC curve (or MC = 6Q). The
diagram is presented below.
P ($)
360*
MPC
320+
280+
240+
216
200+
160+
120+
80+
40+
MB
10
20
30
40
50
60
70
80
90
Q per year

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