suppose that the town of hershey pa has one producer of chocolate and 100 citizens. The production of chocolate provides an external benefit to the citizens of hersey, pa from the pleasant chocolate odor wafting through town.

Assume that the inverse market supply of chocolate is given by p(Q)=440 + q, where q is the quantity of chocolate supplied to the market and p is the market price.

Similarly, assume that the inverse market demand for chocolate is given by p(Q)= 1200 - Q

Chocolate production generates a marginal external benefit of $20 per unit of chocolate produced

a. Identify the relevant externality (consumption/production, positive/negative)

b. Determine the equilibrium price and the quantity of Hershey chocolate, pa