Suppose the market demand for a good takes the form: 1 QD = 120 4 - P and market supply takes the form: Qs = - 30 + Suppose now, that each unit consumed adds an additional 50% of value that is external. What is the efficient (or socially-optimal) quantity in this market?

Suppose the market demand for a good takes the form: 1 QD = 120 4 - P and market supply takes the form: Qs = - 30 + Suppose now, that each unit consumed adds an additional 50% of value that is external. What is the efficient (or socially-optimal) quantity in this market?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

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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Question

Economic

Suppose the market demand for a
good takes the form:
1
Qo = 120 -P
4
and market supply takes the form:
Qs = - 30 +
Suppose now, that each unit consumed adds an
additional 50% of value that is external. What is
the efficient (or socially-optimal) quantity in this
market?

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