b) Indicate the socially efficient price and quantity, using the new supply curve that you've drawn.

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ISBN:9781337617383
Author:Roger A. Arnold
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Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information
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The following demand and supply schedule represents the efficient private allocation of cell
phones.
P
P*
Q*
D
S
Q
a) Cellphone factories contribute impose a negative externality of air pollution on society.
One the figure, draw in a supply curve that accounts for this externality.
Transcribed Image Text:The following demand and supply schedule represents the efficient private allocation of cell phones. P P* Q* D S Q a) Cellphone factories contribute impose a negative externality of air pollution on society. One the figure, draw in a supply curve that accounts for this externality.
b) Indicate the socially efficient price and quantity, using the new supply curve that you've
drawn.
Transcribed Image Text:b) Indicate the socially efficient price and quantity, using the new supply curve that you've drawn.
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