Q6 Suppose the equation for the demand curve in a market is P=100 - 1.5Q. Also, suppose the equation for the supply curve in the same market is P=0.5Q. Suppose there is an external cost of $20 associated with the production of each unit of the good. What is the sociallyoptimal quantity, and what is the price at this quantity?P=$25 Q=50p=$2 Q=44P=$40 Q=40P=$31 Q=46

Here, it is given that the external cost of $20 is associated with the production process that will…

Suppose the equation for the demand curve in a market is P=100 - 1.5Q. Also, suppose the equation for the supply curve in the same marke: is P=0.5Q. Suppose there is an external cos: of $20 associated with the production of each unit of the good. What is the socially optimal quantity, and what is the price at this quantity? P=$25 Q#50 P=$2 Q=44 P=$40 Q=40 o Pa$31 Qu4s

Suppose the equation for the demand curve in a market is P=100 - 1.5Q. Also, suppose the equation for the supply curve in the same marke: is P=0.5Q. Suppose there is an external cos: of $20 associated with the production of each unit of the good. What is the socially optimal quantity, and what is the price at this quantity? P=$25 Q#50 P=$2 Q=44 P=$40 Q=40 o Pa$31 Qu4s

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

Suppose the equation for the demand curve in a market is P=100 - 1.5Q. Also, suppose the equation for the supply curve in the same market is P=0.5Q. Suppose there is an external cost of $20 associated with the production of each unit of the good. What is the socially
optimal quantity, and what is the price at this quantity?
P=$25 Q=50
p=$2 Q=44
P=$40 Q=40
P=$31 Q=46

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