The table below shows the supply and demand conditions for a firm that will play trumpets on the streets when requested. Qs1 is the quantity supplied without social costs. Qs2 is the quantity supplied with social costs. How does accounting for the externality affect the equilibrium price and quantity? Price Qd Qs1 Qs2 $20 0 10 8 $18 1 9 7 $15 2.5 7.5 5.5 $12 4 6 4 $10 5 5 3 $5 7.5 2.5 0.5
The table below shows the supply and demand conditions for a firm that will play trumpets on the streets when requested. Qs1 is the quantity supplied without social costs. Qs2 is the quantity supplied with social costs. How does accounting for the externality affect the equilibrium price and quantity? Price Qd Qs1 Qs2 $20 0 10 8 $18 1 9 7 $15 2.5 7.5 5.5 $12 4 6 4 $10 5 5 3 $5 7.5 2.5 0.5
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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- The table below shows the
supply and demand conditions for a firm that will play trumpets on the streets when requested. Qs1 is the quantity supplied withoutsocial costs. Qs2 is the quantity supplied with social costs. How does accounting for the externality affect theequilibrium price and quantity?
Price |
Qd |
Qs1 |
Qs2 |
$20 |
0 |
10 |
8 |
$18 |
1 |
9 |
7 |
$15 |
2.5 |
7.5 |
5.5 |
$12 |
4 |
6 |
4 |
$10 |
5 |
5 |
3 |
$5 |
7.5 |
2.5 |
0.5 |
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