Suppose demand is QD=12−P and supply is QS=P. There is a constant positive externality of $3 per unit (marginal external benefit, MEB = $3). Find the market equilibrium quantity and the socially optimal quantity. the market equalibrium quantity is? the socially optimal quantity is?
Suppose demand is QD=12−P and supply is QS=P. There is a constant positive externality of $3 per unit (marginal external benefit, MEB = $3). Find the market equilibrium quantity and the socially optimal quantity. the market equalibrium quantity is? the socially optimal quantity is?
Chapter17: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section: Chapter Questions
Problem 2QP
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Question
Suppose demand is
QD=12−P
and supply is
QS=P.
There is a constant positive externality of
$3
per unit (marginal external benefit, MEB =
$3).
Find the market
the market equalibrium quantity is?
the socially optimal quantity is?
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