Market Failure - End of Chapter Problem Suppose that the invenie demand for marching hand music is given by P = $1,000 - Because marching hands across the world produce music of sufficient quality at increasing marginal cost, the industry marginal cost is given by MC = 30 Unfortunately, marching band music is not produced in a vacuum: People near marching hands become increasingly aggravated, the more music they hear. Al the industry Level, the external marginal cost is given by EMC = 40 2. In the accompanying diagram, graph the demand, marginal cost, and external marginal cost functions. b. If marching buns do not consider the external marginal costs they impose on others, 600 marching hands will be hired. aut 100 to 2009 200 Quality of machine Incorrect i. Calculate the consumer surplus (C5). producer surplus (PS), and total surplus (TS) to market participants. CS=$ 163020.50 PS = $ 122479.50 Incorrect Incorrect TS=$ 285500 Incorrect c. The social marginal cost is d. If the bands were forced to consider the external marginal costs, the quantity of marching 30 10 hand music would be 500 and the price of marching bund music would be $500 -10 Incorrect e. As you did in part b, calculate consumer surplus and producer surplus. Round to w places after the decimal if necessary CS$ 125000 PS = 156250 Incorrect