Externalities with policy intervention

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.

Externalities with policy interventions Outcomes by Market Group Transactions Avg. Price Total Surplus Buyer Surplus Seller Surplus External Surplus Government Efficient 9.00 N/A 18.90 N/A N/A -14.40 N/A Equilibrium 12.00 4.00 16.20 21.00 14.40 -19.20 0.00 Average 13.00 3.74 13.10 24.24 9.66 -20.80 0.00 13.00 4.21 11.90 18.01 14.69 -20.80 0.00 2 13.00 3.26 14.30 30.47 4.63 -20.80 0.00 $15.00- $15.00- $11.25 $11.25 Dollars $7.50 Price $7.50 $3.75 $3.75- $0.00- $0.00 - -Marginal -Marginal -Marginal O-Marginal .....Efficient Equilibrium .....Equilibrium Private Cost Private Benefit Societal Cost Societal Benefit Transactions ($4.95) ($4.00)