Consider the perfectly competitive market for guavas. The market's inverse demand curve is p = 720 - 10Q. Firms selling guavas at the market have marginal cost curve MC^P = 10Q. Also assume that each guava sold at the market has negative social cost (less space for other stores), with a cost of space-taking of MC^st = 15Q. However, there is also a positive externality that guava firms receive (more people) equal to MB^mp = 5Q (MB =marginal benefit).

1. What are the perfectly competitive equilibrium price and quantity in this market?
2. What is the socially optimal equilibrium price and quantity in this market?
3. Draw and label the market using the following curves: demand, private marginal cost, social marginal cost. Label the following points - the perfectly competitive equilibrium and the socially optimal equilibrium. Also label axes and where curves cross axes.
4. What is deadweight loss in this market?
5. What standard (quantity) should this market set to ensure the socially optimal level of guavas.