Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated $1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P.

Calculate the market equilibrium quantity.

Calculate the price consumers would have to pay for the market to achieve the socially optimal level of production. [Hint: use QS = QS + tax but firms will receive a price P - t, therefore, QS = -100 + 100 (P-1). Find new equilibrium price].

Calculate the market equilibrium quantity.

Calculate the tax revenue collected by the government.

Suppose residents of Toad hop live on the Quebecer River, a river prone to flooding. Suppose there are 1000 people who value flood control more than the 1000 people. Demand QD = 100 P, Demand QD = 50 P Where Q measures the quality of flood control. If the price of a unit of flood control is $100,000 and the citizens of Toad hop did not work together, what would be the amount of flood control purchased?