econ question

Question 2 30 pts QUESTION 2: 30 POINTS TOTAL Consider a single firm that produces sneakers at a cost of c (q) = 20q + $9 where q denotes the quantity of sneakers in pairs. In addition, the firm's production process uses fossil fuel that generates a harmful greenhouse gas. Let us suppose that the cost of this firm's contribution to greenhouse effects can be written in monetary terms as a function of the quantity of sneakers it produces as follows: s(q) = 100 + 20q. Assuming that this firm operates in a perfectly competitive market and that the price of a pair of sneakers is $150, answer the following: A. Find the profit-maximizing quantity of output by this firm. [10 points] B. Find the Pareto-efficient quantity of output, and briefly explain why this quantity differs from what you found in part (A) of this question. [10 points] C. How could the government use a tax or subsidy to eliminate the inefficiency that would otherwise arise with the "invisible hand" alone. Be as precise as possible. [10 points] Upload Choose a File