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.
Transcribed Image Text:
Price Quantity Quantity Demanded Supplied $ 75 $100 $125 $150 $175 $200 $225 $250 800 750 700 650 600 550 500 450 150 300 450 600 750 900 1,050
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a The efficient quantity is 450 car alarms This can be found by ...View the full answer
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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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