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Write the private MB of a flower purchaser as 20 - Q, where Q is the number of flowers purchased. Each flower generates 12 units
Write the private MB of a flower purchaser as 20 - Q, where Q is the number of flowers purchased. Each flower generates 12 units of (marginal) external benefit. The marginal cost of flower production is 2 + 2Q.
Rounding to the nearest whole number if necessary, answer the following questions:
- What is the competitive equilibrium quantity?
- What is the socially optimal quantity?
- What is the DWL?
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