Suppose that the inverse demand curve for paper is (p=200-Q), the private marginal cost (unregulated competitive market

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Suppose that the inverse demand curve for paper is $p=200-Q$, the private marginal cost (unregulated competitive market supply) is $M C^{p}=80+Q$, and the marginal harm from gunk is $M C^{g}=Q$.

a. What is the unregulated competitive equilibrium?

b. What is the social optimum? What specific tax (per unit of output or gunk) results in the social optimum?

c. What is the unregulated monopoly equilibrium?

d. How would you optimally regulate the monopoly? What is the resulting equilibrium?

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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Question Posted: Mar 22, 2024 12:00 AM

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Suppose that the inverse demand curve for paper is (p=200-Q), the private marginal cost (unregulated competitive market

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a To find the unregulated competitive equilibrium we need to set the private marginal cost equal to ...View the full answer

Microeconomics

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