1. Discuss the Competitive Markets and Externalities simulations (both with and without policy interventions) .
   • What impact do policy interventions have on the supply and demand equilibrium for a product? Provide specific examples from the simulation to illustrate.
   • What are the determinants of price elasticity of demand? Identify at least three examples. Based on the outcome of the simulation, explain how price elasticity can impact pricing decisions and total revenue of the firm.
   • Based on the results of the simulation, can policy market interventions cause consumer or producer surplus? Explain why using specific reasoning.

Personal Unit Price Cost Nuisance Payoff 1 $3.97 $1.70 -$0.13 $2.14 2 $3.52 $3.33 -$0.13 $0.06 Total Nuisance caused by others -$1.07 Total $1.13