Suppose that the demand for a chemical is given by Q = 100 – 2P, where quantity is measured in pounds. The market supply is given by MC = 5. Assume that the marginal external damage of this product is $3 per unit. (a) What is the equilibrium price and quantity of this good without government intervention? (b) What level of taxation would generate the socially efficient level of the good?

Q: c. How much total consumer surplus will each of them receive at a price of $32?

A: Last parts C and d are answered below:

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