Question: Bill has discovered a method for purifying drinking water that also cleans the air. Bill needs financial capital to produce and market his invention.

Bill has discovered a method for purifying drinking water that also cleans the air. Bill needs financial capital to produce and market his invention.

Bill has discovered a method for purifying drinking water that also cleans the air. Bill needs financial capital to produce and market his invention. Consider the graph of the market for financial capital. Use this information to answer the questions. How much financial capital will Bill borrow and invest on his own? $ million Suppose Bill obtains a patent that allows him to gain the social return. How much will Bill borrow and invest? $ million Rate of return 10% 9 8 7 6 5 4 3 2 1 0 $10 Bill's demand Supply Social demand 20 30 40 Quantity of financial capital (in millions) 50

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