Assume the demand curve for gold rings is given by the following: p = 500 - 2Q. The marginal private cost curve or supply curve for gold rings is given by: p = 50 + 2Q. In producing gold rings, mercury is released into the soil and this causes environment damage to groundwater aquifers. This production externality means that marginal social cost exceeds

marginal private cost is given by the following: E = Q.

1. In a competitive equilibrium the amount produced equals ____ and equilibrium price is ____:

a. 112.5,275

b. 90, 320

c. 112.5, 320

d. 90,275

e. 275,275

Answer rating: 100% (QA)

To find the competitive equilibrium we need to set the marginal ... View the full answer