The following table shows the quantities of car alarms demanded and supplied per year in a town:
Question:
Without drawing a graph, determine the efficient quantity in this market under each of the following assumptions:
a. Each car alarm sold creates a negative externality (noise pollution) that causes $100 in harm to the public.
b. Each car alarm creates a positive externality (reduced law enforcement costs) that provides $100 in benefits to thepublic.
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Related Book For
Macroeconomics Principles and Applications
ISBN: 978-1133265238
5th edition
Authors: Robert e. hall, marc Lieberman
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