Question
1.Consider the market for fire extinguishers. a.Do fire extinguishers cause a positive externality, negative externality, or no externality? Why? b.Using graphs, show the private market
1.Consider the market for fire extinguishers.
a.Do fire extinguishers cause a positive externality, negative externality, or no externality? Why?
b.Using graphs, show the private market equilibrium and whether that differs from the social equilibrium for fire extinguishers.
c.Now assume that fire extinguishers generate a positive consumption externality equal to $10 per extinguisher. What type of policy intervention, if any, should the government implement to yield a socially efficient equilibrium?
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Big Ideas Math A Common Core Curriculum Blue
Authors: Ron Larson, Laurie Boswell
1st Edition
1608402282, 978-1608402281
