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The market for paper in a particular region in the United States is characterized by the following
QD = 160,000 − 2000P and QS = 40,000 + 2000P
where QD is the quantity demanded in 100-pound lots, QS is the quantity supplied in 100-pound lots, and P is the
a. Calculate the output and price of paper if it is produced under competitive conditions and no attempt is made to monitor or regulate the dumping of effluent.
b. Determine the socially efficient price and output of paper.
c. Explain why the answers you calculated in parts (a) and (b) differ.
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Chapter 18 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
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