Qp = 2000 - 4P Qs = P - 100 Suppose college enrollment also generates a social benefit of $100 per student. a. Without any government interventions, what is the market equilibrium quantity of enrollment? students b. In the presence of this externality, what is the optimal quantity of enrollment? students

Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter14: Environmental Economics
Section: Chapter Questions
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Find market equilibrium quantity of enrollment and optimal quantity of enrollment
Suppose enrollment at a small university can be represented by the following demand and supply
curves:
QD
= 2000 - 4P
Qs = P - 100
Suppose college enrollment also generates a social benefit of $100 per student.
a. Without any government interventions, what is the market equilibrium quantity of enrollment?
students
b. In the presence of this externality, what is the optimal quantity of enrollment?
students
Transcribed Image Text:Suppose enrollment at a small university can be represented by the following demand and supply curves: QD = 2000 - 4P Qs = P - 100 Suppose college enrollment also generates a social benefit of $100 per student. a. Without any government interventions, what is the market equilibrium quantity of enrollment? students b. In the presence of this externality, what is the optimal quantity of enrollment? students
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