The graph below illustrates a market for cigarettes. Use it to answer the questions that follow. a.

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The graph below illustrates a market for cigarettes. Use it to answer the questions that follow.

Price of cigarettes $10 $8 $7 Marginal social cost 120 Marginal private cost Demand 180 Quantity of

a. Based only on the graph, are there positive or negative externalities associated with cigarettes? Explain your answer.

b. Show the equilibrium price and quantity in this market.

c. What is the socially optimal quantity in this market?

d. According to the graph, what is the marginal external cost of a packet of cigarettes?

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Introduction To Chemical Principles

ISBN: 9780321814630

11th Edition

Authors: H. Stephen Stoker

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Question Posted: Nov 22, 2023 07:31 AM

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The graph below illustrates a market for cigarettes. Use it to answer the questions that follow. a.

Question:

Price of cigarettes $10 $8 $7 Marginal social cost 120 Marginal private cost Demand 180 Quantity of cigarettes (millions of packs) Stevenson/Wolfers, Principles of Economics, 1e, 2020 Worth Publishers

Step by Step Answer:

a Based only on the graph there are negative externalities associated with cigarettes This can be deduced from the fact that the marginal social cost ...View the full answer

Introduction To Chemical Principles

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