Hi, tutor

I'd like to ask an externality question, could you please show me the solution and diagram? Thank you very much.

Consider the market for education. Education services are provided by a competitive industry with a marginal cost MC of MC = 3q, where q is the quantity of education. The private marginal benet of education (PMB) for the consumers of education is PMB = 50 - q. Education, however, has a positive consumption externality e of $10 per unit. (a) What is the market equilibrium price and quantity? Illustrate the market outcome on a diagram. (2 marks) (b) Considering the private marginal benet and the externality, determine the equation for the social marginal benet (SMB) for education. What is socially optimal quantity of education? (2 marks) (c) Dene deadweight loss. What is the deadweight loss, if any, in the market outcome for education? Provide intuition for your result and show the deadweight loss on your diagram. (2 marks) ((1) Provide details (including calculations) on a policy option for the government to achieve the optimal outcome in the market. Explain the rationale underlying your answer. Given this is a consumption externality, should the government target this policy to the consumption side of the market? Explain your answer. (4 marks)