4.2 Suppose that the inverse demand curve for paper is p = 200 - Q, the private...

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4.2 Suppose that the inverse demand curve for paper is p = 200 - Q, the private marginal cost (unregulated competitive market supply) is MCp = 80 + Q, and the marginal harm from gunk is MCg = Q.

a. What is the unregulated competitive equilibrium?

b. What is the social optimum? What specific tax

(per unit of output or gunk) results in the social optimum?

c. What is the unregulated monopoly equilibrium?

d. How would you optimally regulate the monopoly?

What is the resulting equilibrium? (Hint:

See Solved Problems 18.1 and 18.2.)

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Microeconomics

ISBN: 9780133456912

7th Edition

Authors: Jeffrey M. Perloff

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Question Posted: Nov 15, 2024 07:00 AM

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4.2 Suppose that the inverse demand curve for paper is p = 200 - Q, the private...

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