Question 9:

You are an industry analyst that specializes in an industry where the market inverse demand isP= 200 - 3Q.The external marginal cost of producing the product isMC_External= 9Q,and the internal cost isMC_Internal= 16Q.

Instructions: Enter your responses rounded to the nearest two decimal places.

a. What is the socially efficient level of output?

__________________units

b. Given these costs and market demand, how much output would a competitive industry produce?

_________________units

c. Given these costs and market demand, how much output would a monopolist produce?

__________units

d. Which of the following areactions the government could take to induce firms in this industry to produce the socially efficient level of output.

Instructions:In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box.

• Nonrival consumption
• unanswered
• Pollution permits
• unanswered
• Pollution taxes
• unanswered