The following table shows the quantities of car alarms demanded and supplied per year in a town:

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The following table shows the quantities of car alarms demanded and supplied per year in a town:

The following table shows the quantities of car alarms demanded

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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Macroeconomics Principles and Applications

ISBN: 978-1133265238

5th edition

Authors: Robert e. hall, marc Lieberman

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