Private Marginal Private Marginal Social Marginal Quantity Benefit (PMB) Cost (PMC) External Benefit Benefit (SMB) 0 $220 $20 $80 $300 5 $200 $40 $80 $280 10 $180 $60 $80 $260 15 $160 $80 $80 $240 20 $140 $100 $80 $220 25 $120 $120 $80 $200 30 $100 $140 $80 $180 35 $80 $160 $80 $160 40 $60 $180 $80 $140 45 $40 $200 $80 $120 50 $20 $220 $80 $100 What is the Private Market Equilibrium Price? $What is the Private Market Equilibrium Price? $ What is the Private Market Equilibrium Quantity? There is a positive externality associated with this good which causes an external benefit of $80 at every quantity, as shown above. What is the Socially Optimal Price? $ What is the Socially Optimal Quantity? Relative to the Private Market Equilibrium Price, the Socially Optimal Price (select from this menu) Relative to the Private Market Equilibrium Quantity, the Socially Optimal Quantity (select from this menu) In the absence of any government intervention in this market, it is most likely that the Private Market will (select from this menu) If the government wanted to internalize this externality and help the market reach the Socially Optimal Quantity and Price, which course of action would be best? (select from this menu)