Let the supply and demand for widgets be given by the following schedule. Price: 3, 4, 5, 6, 7, 8, 9, 10, 11 Quantity Supplied: 100, 200, 300, 400, 500, 600, 700, 800, 900 Quantity Demanded: 900, 800, 700, 600, 500, 400, 300, 200, 100 a. What quantity will be produced here? b. What quantity is efficient if there are no external costs or benefits? c. What quantity is efficient if there is an external cost of $6 per unit from pollution caused by the widget factories?
Let the supply and demand for widgets be given by the following schedule. Price: 3, 4, 5, 6, 7, 8, 9, 10, 11 Quantity Supplied: 100, 200, 300, 400, 500, 600, 700, 800, 900 Quantity Demanded: 900, 800, 700, 600, 500, 400, 300, 200, 100 a. What quantity will be produced here? b. What quantity is efficient if there are no external costs or benefits? c. What quantity is efficient if there is an external cost of $6 per unit from pollution caused by the widget factories?
Chapter8: Market Failure
Section: Chapter Questions
Problem 2P: Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and...
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Let the supply and
Price: 3, 4, 5, 6, 7, 8, 9, 10, 11
Quantity Supplied: 100, 200, 300, 400, 500, 600, 700, 800, 900
Quantity Demanded: 900, 800, 700, 600, 500, 400, 300, 200, 100
a. What quantity will be produced here?
b. What quantity is efficient if there are no external costs or benefits?
c. What quantity is efficient if there is an external cost of $6 per unit from pollution caused by the widget factories?
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