Answered: The market for pens in Howards is…

The market for pens in Howards is perfectly competitive with no externalities. Market demand is given by Q=165-P. Market Supply is given by Q=P-16.What is total Surplus in this market?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter16: Public Goods And Public Choice

Section: Chapter Questions

Problem 1.1P: (Optimal Provision of Public Goods) Using at least two individual consumers, show how the market...

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The market for pens in Howards is perfectly competitive with no externalities. Market demand is given by Q=165-P. Market Supply is given by Q=P-16.What is total Surplus in this market?

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(Optimal Provision of Public Goods) Using at least two individual consumers, show how the market demand curve is derived from individual demand curves (a) for a private good and (b) for a public good. Once you have derived the market demand curve in each case, introduce a market supply curve and then show the optimal level of production.
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Provide the correct answer please ... If there are no externalities a competitive market achieves economic efficiency. If there is anegative externality, economic efficiency will not be achieved because a. too much of the good will be produced. b.a deadweight loss will occur that is equal to the area under the demand curve for the good. c.too little of the good will be produced. d.economic surplus is maximized.
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