The demand and supply curves for production of plastic are shown as follow: Qd = 40,000 -
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Question:
The demand and supply curves for production of plastic are shown as follow:
Qd = 40,000 - 5000P Qs = 10,000 + 5,000P
The marginal external cost associate with production of plastic is given as: MEC = 0.0003Q
a. What is the competitive price and output?
b. What are the socially optimal levels for price and output?
c. Draw a diagram to show the costs and benefits to the society from the production of plastic.
Related Book For
Financial Accounting A User Perspective
ISBN: 978-0470676608
6th Canadian Edition
Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry
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