on for the supply curve in the same market is P=0.5Q. Suppose there is an external cost of $40 associated with the production of each unit of the good. What is the socially optimal quantity, and what is the price at this quantity? P=$2 Q=44 P=$55 Q=30 P=$34 Q=44
on for the supply curve in the same market is P=0.5Q. Suppose there is an external cost of $40 associated with the production of each unit of the good. What is the socially optimal quantity, and what is the price at this quantity? P=$2 Q=44 P=$55 Q=30 P=$34 Q=44
Chapter17: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section: Chapter Questions
Problem 2QP
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Question
Suppose the equation for the demand curve in a market is P=100-1.5Q. Also, suppose the equation for the supply curve in the same market is P=0.5Q. Suppose there is an external cost of $40 associated with the production of each unit of the good. What is
the socially optimal quantity, and what is the price at this quantity?
P=$2 Q=44
P=$55 Q=30
P=$34 Q=44
P=$31 Q=46
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