Question
1) A good that generates a negative externality is sold in a competitive market. Demand is defined by P(Q)=600-2Q and supply is defined by P(Q)=Q.
1) A good that generates a negative externality is sold in a competitive market. Demand is defined by P(Q)=600-2Q and supply is defined by P(Q)=Q. The externality from production is E(Q)=0.5Q2.
a)What is the quantity produced in the competitive equilibrium? Q=
b)What is the price in the competitive equilibrium? P=
c)What is consumer surplus in the competitive equilibrium? CS=
d)What is producer surplus in the competitive equilibrium? PS=
e)What is the total value of the externality in the competitive equilibrium? E=
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Competitive Equilibrium with Negative Externality a Quantity Produced Q To find the equilibriumwe ne...
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Economics
Authors: R. Glenn Hubbard
6th edition
978-0134797731, 134797736, 978-0134106243
