The demand for cigarettes is given by P = 400 -0.2Q. Cigarettes are manufactured at a constant marginal cost of 50 and sold in a competitive market. What is the quantity of cigarettes sold in equilibrium? QPrivate = 1750 If cigarettes generate a marginal external cost of MEC = 0.05Q, what is the socially optimal level of cigarettes? QSocially optimal 500- 450- 400- 350- 300- 250- 200- 150- 100- 50- Price 400 Figure 1 800 1200 Output 1600 D 2000 Q
The demand for cigarettes is given by P = 400 -0.2Q. Cigarettes are manufactured at a constant marginal cost of 50 and sold in a competitive market. What is the quantity of cigarettes sold in equilibrium? QPrivate = 1750 If cigarettes generate a marginal external cost of MEC = 0.05Q, what is the socially optimal level of cigarettes? QSocially optimal 500- 450- 400- 350- 300- 250- 200- 150- 100- 50- Price 400 Figure 1 800 1200 Output 1600 D 2000 Q
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter5: Difficult Cases For The Market And The Role Of Government
Section: Chapter Questions
Problem 10CQ
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Please help me
![The demand for cigarettes is given by
P = 400 -0.2Q.
Cigarettes are manufactured at a constant marginal cost of 50 and sold in a
competitive market.
What is the quantity of cigarettes sold in equilibrium?
QPrivate = 1750
If cigarettes generate a marginal external cost of MEC = 0.05Q, what is the
socially optimal level of cigarettes?
QSocially optimal
C
500-
450-
400-1
350-
300-
250-
200-
150-
100-
50-
0
Price
400
800
Figure 1
1200 1600
Output
D
2000
Q](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2fc0ee15-0f91-464a-9c89-ff2e773a521f%2F43e9cc80-d77b-4fb4-95a6-134ace8b9e0d%2Fq6zky69_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The demand for cigarettes is given by
P = 400 -0.2Q.
Cigarettes are manufactured at a constant marginal cost of 50 and sold in a
competitive market.
What is the quantity of cigarettes sold in equilibrium?
QPrivate = 1750
If cigarettes generate a marginal external cost of MEC = 0.05Q, what is the
socially optimal level of cigarettes?
QSocially optimal
C
500-
450-
400-1
350-
300-
250-
200-
150-
100-
50-
0
Price
400
800
Figure 1
1200 1600
Output
D
2000
Q
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