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
Chapter17: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section: Chapter Questions
Problem 2QP
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