Please refer to the background information below to answer the following five questions. Royal Air Force...

 

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Please refer to the background information below to answer the following five questions. Royal Air Force (RAF) mechanics protect airplanes against gremlins, a highly opportunistic species of saboteur. The demand and supply curves for protection are given by the following equations. thousand planes protected per year thousand planes protected per year Demand: Q = 200 - P Supply: Q 2P – 15 where P is in pounds per plane. The social marginal benefit (SMB) is given by the following equation Q 200 0.9 x SMB thousand planes protected per year and the private marginal cost and social marginal cost are identical. 28. If the market is left unregulated, the market equilibrium level of protection is [ Answer28A ] thousand planes protected per year, at a price of [ Answer28B ] pounds per plane. 29. The total economic surplus to society from the market equilibrium level of protection is [ Answer29 1 thousand pounds per year. 30. The socially efficient level of protection is [ Answer30 ] thousand planes protected per year. 31. If the government applies a per unit subsidy on protection to achieve the socially efficient level, it should implement a per unit subsidy of [ Answer31 ] pounds per plane protected . 32. This per unit subsidy will cost the government a total of [ Answer32 ] thousand pounds of subsidy expenditure per year. Please refer to the background information below to answer the following five questions. Royal Air Force (RAF) mechanics protect airplanes against gremlins, a highly opportunistic species of saboteur. The demand and supply curves for protection are given by the following equations. thousand planes protected per year thousand planes protected per year Demand: Q = 200 - P Supply: Q 2P – 15 where P is in pounds per plane. The social marginal benefit (SMB) is given by the following equation Q 200 0.9 x SMB thousand planes protected per year and the private marginal cost and social marginal cost are identical. 28. If the market is left unregulated, the market equilibrium level of protection is [ Answer28A ] thousand planes protected per year, at a price of [ Answer28B ] pounds per plane. 29. The total economic surplus to society from the market equilibrium level of protection is [ Answer29 1 thousand pounds per year. 30. The socially efficient level of protection is [ Answer30 ] thousand planes protected per year. 31. If the government applies a per unit subsidy on protection to achieve the socially efficient level, it should implement a per unit subsidy of [ Answer31 ] pounds per plane protected . 32. This per unit subsidy will cost the government a total of [ Answer32 ] thousand pounds of subsidy expenditure per year.