If all colleges are private and the market for education is competitive, how many students enroll, what is the tuition, and what is the deadweight loss created?
The marginal cost of educating a student is a constant $4,000 a year and Figure 16.5 shows the students€™ marginal benefit curve. Suppose that college education creates an external benefit of a constant $2,000 per student per year.

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3 10 4 D- MB 0 20 30 450 60 Students (thousands per year)