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The market for good Q is perfectly competitive. However, Consumers' marginal benefit is MB = 90-Q Producers' marginal private cost is MC = Q.

The market for good Q is perfectly competitive. However, Consumers' marginal benefit is MB = 90-Q Producers' marginal private cost is MC = Q.

Economics For Today
Economics For Today
10th Edition
ISBN:9781337613040
Author:Tucker
Publisher:Tucker
Chapter14: Environmental Economics
Section: Chapter Questions
Problem 11SQ
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The market for good Q is perfectly competitive. However, it features negative externalities. Consumers' marginal benefit is MB = 90-Q Producers' marginal private cost is MC = Q. The production of this good generates a marginal external cost MEC=4. a) In the equilibrium of this market, the perfect competition quantity is Qpc= 45 b) The socially efficient quantity is Qsoc= 43 c) To achieve efficiency, the government can introduce *Select Answer* $2 per unit subsidy $4 per unit subsidy $2 per unit tax QUESTION 9 $4 per unit tax 40 The market for good Q is perfectly competitive. Howeve rnalities. 41 43 45 Consumers' marginal private benefit is MB = 100-Q 50 51 Click Save and Submit to save and submit. Click Save All 53 ers. 55
Transcribed Image Text:The market for good Q is perfectly competitive. However, it features negative externalities. Consumers' marginal benefit is MB = 90-Q Producers' marginal private cost is MC = Q. The production of this good generates a marginal external cost MEC=4. a) In the equilibrium of this market, the perfect competition quantity is Qpc= 45 b) The socially efficient quantity is Qsoc= 43 c) To achieve efficiency, the government can introduce *Select Answer* $2 per unit subsidy $4 per unit subsidy $2 per unit tax QUESTION 9 $4 per unit tax 40 The market for good Q is perfectly competitive. Howeve rnalities. 41 43 45 Consumers' marginal private benefit is MB = 100-Q 50 51 Click Save and Submit to save and submit. Click Save All 53 ers. 55
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