In the town of Greenville, there are two main products that people care about: Bottled Milk for nutrition, and Electricity so they can refrigerate their milk and open the bottles at night. The third thing the citizens care about is Clean Air so they can enjoy their milk outside in Spring.

Bottled Milk Market:

Demand for milk Qd = -15P 450

Supply for milk Qs = 15P-150

Externalities: It turns out that the bottled milk market generates a negative externality, mainly that the plastic bottles pollute the town and nearby parks, the Marginal External Cost (MEC) of this pollution is:

MEC = 0.1 * Q

MEP = 0

TEC = 0.05 * Q2

Restate the Supply and Demand functions you derived earlier by including into the Marginal Social Cost function, and the Marginal Social Benefit function, respectively, by including this the MEC into account. (recall: MSC = MPC MEC, MSB = MPB MEP). Then calculate the efficient equilibrium QE and PE, and the welfare gain by moving from the competitive to the efficient equilibrium.