1)The marginal cost of landscaping in an area is given by MC = 8 + 2Q, where Q is the amount of landscaping. The marginal private benefit of landscaping is MPB = 50 - 4Q. In addition to the private benefits received by homeowners who have landscaping done, people who walk or drive past these homes also benefit because their view is made more attractive; the marginal external benefit created by landscaping is MEB = 6 + 2Q.

(a)What quantity of landscaping will be produced by the free market?

(b)What is the efficient amount of landscaping? How much deadweight loss is there in the market for landscaping?

(c)The local government in this area has realized that the current amount of landscaping produced by the free market is inefficient, and wants to correct this inefficiency by subsidizing landscaping. How large should the subsidy per unit of landscaping be to induce the market to produce the efficient amount?