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?PriceQdQs1Qs2$200108$18197$152.57.55.5$12464$10553$57.52.50.5

Social cost is the sum of private costs and external costs imposed on society. A supply curve…

Answered: The table below shows the supply and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

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 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

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