The market equilibrium quantity is units of electric cars, but the socially optimal quantity of electric car production is To create an incentive for the firm to produce the socially optimal quantity of electric cars, the government could impose a per unit of electric cars. units. of $

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Chapter1: Making Economics Decisions
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The market equilibrium quantity is
units of electric cars, but the socially optimal quantity of electric car production is
To create an incentive for the firm to produce the socially optimal quantity of electric cars, the government could impose a
per unit of electric cars.
units.
of $
Transcribed Image Text:The market equilibrium quantity is units of electric cars, but the socially optimal quantity of electric car production is To create an incentive for the firm to produce the socially optimal quantity of electric cars, the government could impose a per unit of electric cars. units. of $
Homework
Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $490 per unit.
PRICE (Dollars per unit of electric cars)
1400
1260
1120
980
840
700
560
420
280
140
0
0
☐
O
O
☐ Supply
(Private Cost)
6
Demand
(Private Value)
Social Cost
Transcribed Image Text:Homework Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $490 per unit. PRICE (Dollars per unit of electric cars) 1400 1260 1120 980 840 700 560 420 280 140 0 0 ☐ O O ☐ Supply (Private Cost) 6 Demand (Private Value) Social Cost
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