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Let the demand in a competitive market be given by P=100-2Q. The private marginal cost (supply) is given by MC(private)=20. But consumption/production of the good
Let the demand in a competitive market be given by P=100-2Q. The private marginal cost (supply) is given by MC(private)=20. But consumption/production of the good leads to a negative externality estimated at MC(ext)=2Q. Calculate the deadweight loss in the unregulated market outcome.
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Economics
Authors: R. Glenn Hubbard
6th edition
978-0134797731, 134797736, 978-0134106243
