Suppose the market for plastic bag is represented by the following equations: Qd = 1000-2p Qs = -20 +2p ic bags are associated with an environmental cost of Php 50 per bag. What is the free-market equilibrium quantity? What is the socially optimal quantity? What can be imposed to correct the externality? (tax / subsidy) By how much hould the amount of the policy be?
Suppose the market for plastic bag is represented by the following equations: Qd = 1000-2p Qs = -20 +2p ic bags are associated with an environmental cost of Php 50 per bag. What is the free-market equilibrium quantity? What is the socially optimal quantity? What can be imposed to correct the externality? (tax / subsidy) By how much hould the amount of the policy be?
Chapter1: Making Economics Decisions
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![Suppose the market for plastic bag is represented by the following equations:
Qd = 1000-2p
Q₁ = -20 + 2p
Plastic bags are associated with an environmental cost of Php 50 per bag.
What is the free-market equilibrium quantity?
What is the socially optimal quantity?
What can be imposed to correct the externality? (tax / subsidy) By how much
should the amount of the policy be?
a.
b.
C.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F04698cd3-976f-4d41-a6a2-cd0e62d61d7a%2F130d702e-3dc5-4e1a-a6bc-cf1e6e457ca7%2Fksj72q_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose the market for plastic bag is represented by the following equations:
Qd = 1000-2p
Q₁ = -20 + 2p
Plastic bags are associated with an environmental cost of Php 50 per bag.
What is the free-market equilibrium quantity?
What is the socially optimal quantity?
What can be imposed to correct the externality? (tax / subsidy) By how much
should the amount of the policy be?
a.
b.
C.
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