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The market for good Q is perfectly competitive. However, it features negative externalities. Consumers' marginal benefit is MB = 90-Q Producers' marginal private cost is
The market for good Q is perfectly competitive. However, it features negative externalities.
Consumers' marginal benefit is MB = 90-Q
Producers' marginal private cost is MC = Q.
The production of this good generates a marginal external cost MEC=4.
a) In the equilibrium of this market, the perfect competition quantity is QPC= _____
b) The socially efficient quantity is QSOC= _____
c) To achieve efficiency, the government can introduce a $ ____ per unit _____ (subsidy or tax)
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