Plz do the last 3 parts onlyIn 30 min Given:Demand: Q=160 - 2PSupply: Q=-40 +2PExternal Cost: P = QPart AWithout regularization, the market equilibriumcondition is:=> Demand = Supply=> 160-2P = -40 +2P=> 4P = 200=> P = 50From the demand curve : Q=160 -2P = 160 -2*50=160 - 100 = 60 (equilibrium quantity) - it iscorresponding to point A in the diagram belowPart Bwithout regulation, Consumer surplus is given bythe area ABC= (1/2)*60* (160-50) = 3300 (ans.)Part CWithout regulation, the producer surplus is givenas:= (1/2)*60* (50-20) = 900 (ans.)Price160 B5020 PSolutionPart A : 60Part B: 3300Part C: 90060$1D1Quantity • The demand for a good is QD = 160-2P with P being the price and Qpdenoting the quantity demanded. The supply for the good is Qs = -40 +2P with Qs representing the quantity supplied. The production of the goodcreates a marginal external cost P = Q.• Q6. Determine the equilibrium quantity in the absence of any regulation.• Q7. Determine the consumer surplus in the absence of any regulation.Q8. Determine the producer surplus in the absence of any regulation.• Q9. Determine the total external cost in the absence of any regulation.Q10. Determine the efficient (or social) equilibrium quantity.Q11. Determine the deadweight loss associated with the negativeexternality.●31

Externalities: When a firm produces a good sometimes it creates cost or benefits for other firms. If…

• The demand for a good is QD = 160-2P with P being the price and QD denoting the quantity demanded. The supply for the good is Qs = -40 + 2P with Qs representing the quantity supplied. The production of the good creates a marginal external cost P = Q. • Q6. Determine the equilibrium quantity in the absence of any regulation. • Q7. Determine the consumer surplus in the absence of any regulation. • Q8. Determine the producer surplus in the absence of any regulation. • Q9. Determine the total external cost in the absence of any regulation. • Q10. Determine the efficient (or social) equilibrium quantity. • Q11. Determine the deadweight loss associated with the negative externality.

• The demand for a good is QD = 160-2P with P being the price and QD denoting the quantity demanded. The supply for the good is Qs = -40 + 2P with Qs representing the quantity supplied. The production of the good creates a marginal external cost P = Q. • Q6. Determine the equilibrium quantity in the absence of any regulation. • Q7. Determine the consumer surplus in the absence of any regulation. • Q8. Determine the producer surplus in the absence of any regulation. • Q9. Determine the total external cost in the absence of any regulation. • Q10. Determine the efficient (or social) equilibrium quantity. • Q11. Determine the deadweight loss associated with the negative externality.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.7P

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