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Following the prompt and equations given above, plot a figure that graphs the following lines: Marginal cost (MC) Private Marginal Benefit (MBp) Social Marginal Benefit

Following the prompt and equations given above, plot a figure that graphs the following lines:

  • Marginal cost (MC)
  • Private Marginal Benefit (MBp)
  • Social Marginal Benefit (MBs)

Also indicate and label the following areas (assuming the competitive equilibrium prevails):

  • Private consumer surplus, i.e., not including external benefits (CS)
  • External benefits (EB)
  • Producer surplus (PS)
  • Deadweight loss from competitive equilibrium (DWL)

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