Question
You are an industry analyst who specializes in an industry where the market inverse demand is P = 200 4Q. The external marginal cost of
You are an industry analyst who specializes in an industry where the market inverse demand is P = 200 4Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 12Q.
(a) What is the socially efficient level of output? Please show your calculations.
(b) Given these costs and market demand, how much output would a monopolist produce? Please
show your calculations.
(c) Discuss actions the government might take to induce firms in this industry to produce
the socially efficient level of output.
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The End Of Poverty Economic Possibilities For Our Time
Authors: Jeffrey D Sachs, Bono
1st Edition
0143036580, 9780143036586
