Question: 1) A good that generates a negative externality is sold in a competitive market. Demand is defined by P(Q)=600-2Q and supply is defined by P(Q)=Q.

1) A good that generates a negative externality is sold in a competitive market. Demand is defined by P(Q)=600-2Q and supply is defined by P(Q)=Q. The externality from production is E(Q)=0.5Q2.

a)What is the quantity produced in the competitive equilibrium? Q=

b)What is the price in the competitive equilibrium? P=

c)What is consumer surplus in the competitive equilibrium? CS=

d)What is producer surplus in the competitive equilibrium? PS=

e)What is the total value of the externality in the competitive equilibrium? E=

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