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Consider the market for durians, with (Private) Supply and (Private) Demand given by the following: Supply: Q = 213 Demand: Q = 180 2;) Suppose
Consider the market for durians, with (Private) Supply and (Private) Demand given by the following: Supply: Q = 213 Demand: Q = 180 2;) Suppose that this product also produces a negative externality, embodied in a $10 per unit Marginal Economic Cost (MEC). 11. Suppose that currently, there is a shortage of 40 units in the private market. What must be the current price and quantity sold? [2 points] 12. At this quantity sold, what is the Private Marginal Cost of producing for the firm, and what is the Private Marginal Benefit for the Consumer? [2 points] 13. At this quantity sold, what is the Social Marginal Cost of producing for the firm, and what is the Social Marginal Benefit for the Consumer? [2 points] 14. What is the socially optimal quantity to be sold in this market? [3 points]
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