Question 1: Consider the market for lumber. The demand for lumber is given by the inverse demand function p=1102Q The market cost function for rms making lumber is me) = 10Q + Q2 Cutting down trees leads to more carbon dioxide in the air which is bad for society. Scientists estimate that the cost of this pollution is 09 (Q) = 3622 Assume the market for lumber is competitive. (1) How much is produced by the rms? (2) What is the socially best level of production. (3) How much deadweight loss does the externality generate. (4) At the socially best level of production, what is the cost to society from pollution? (5) If the government mandated that the cost of pollution must be zero, what would be the deadweight loss associated with such a policy