Price MSC Answer the following questions using the graph to the left: S = MPC 1. This a market has a (positive, negative) externality equal to $( P3 2. This market is (overproducing, underproducing) by the amount of P4 3. What quantity would society want this market to D = MSB = MPB produce? Also, shade in the area of DWL. P5 4. This market could be fixed by a per-unit Q1 Q2 Q3 Quantity (tax or subsidy) in the amount of $C 5. What is a real-world example of this type of externality? (Be creative- not from class!) 6. What real-world solution could be taken to help correct the market failure caused by the problem in your example above? Be specific. Answer the following questions using the graph to the left: Price 7. This a market has a (positive, negative) externality equal to $ J. P1 8. This market is (overproducing, underproducing) by the amount of C P3 9. What quantity would society want this market to MSB produce? Also, shade in the area of DWL. 10. This market could be fixed by a per-unit (tax or subsidy) in the amount of $( Q1 Q2 Q3 Quantity 11. What is a real-world example of this type of externality? (Be creative- not from class!) 12. What real-world solution could be taken to help correct the market failure caused by the problem in your example above? Be specific