Question
The market for a chemical pesticide can be modeled as given below, where Q is measured in thousands of pounds: MSB = 20
The market for a chemical pesticide can be modeled as given below, where Q is measured in thousands of pounds:
MSB = 20 – 0.4Q MPB = 20 – 0.3Q MSC = MPC = 12 + 0.1Q
Use this model to respond to the following questions.
a. Find the efficient output level for this market.
b. Find the equation that represents the negative consumption externality in this case.
c. Determine the value of a product charge that would achieve the efficient solution.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a To find the efficient output level for this market we need to find the quantity where Marginal Soc...
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Step: 2
Step: 3
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Microeconomics
Authors: Dean Karlan, Jonathan Morduch
1st edition
978-0077332587, 007733258X, 978-0077332648, 77332644, 978-1259163531
