Electric cars (ECS) are an important part of meeting global goals on climate change ECs have emissions up to 33% lower than diesel cars. However, In Europe, electric cars account for only 0 65% of all new sales in 2020 Suppose the marketfor ECs is perfectly competitive. The market demand for ECs is given by p= 15 - 20 and the market supply for ECsis given by p 4Q The marginal social benefit of adopting ECs is given by p = 15-Q To encourage the purchase of ECs, the government decides to subsidise the consumers The optimal level of subsidy is %3D for the market to reach a socially optimal equilibrium.

Electric cars (ECS) are an important part of meeting global goals on climate change ECs have emissions up to 33% lower than diesel cars. However, In Europe, electric cars account for only 0 65% of all new sales in 2020 Suppose the marketfor ECs is perfectly competitive. The market demand for ECs is given by p= 15 - 20 and the market supply for ECsis given by p 4Q The marginal social benefit of adopting ECs is given by p = 15-Q To encourage the purchase of ECs, the government decides to subsidise the consumers The optimal level of subsidy is %3D for the market to reach a socially optimal equilibrium.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.9P

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