EBK INTERNATIONAL ECONOMICS
7th Edition
ISBN: 9780134523866
Author: Gerber
Publisher: YUZU
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Question
Chapter 5, Problem 9SQ
To determine
Illustrate the demand and supply curves to find the external cost with the determination of market determined price and output level.
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Chapter 5 Solutions
EBK INTERNATIONAL ECONOMICS
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- Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and output. a. Assuming that the production of televisions generates external costs, illustrate the effect of the producers being forced to pay a tax equal to the external costs generated, and indicate the equilibrium output. b. If instead of generating external costs, television production generates external benefits, illustrate the effect of the producers being given a subsidy equal to the external benefits generated, and indicate the equilibrium output.arrow_forward(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.arrow_forward
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