Question text Suppose there is a market characterized by the following demand and supply curves: MB = P = 22 - 1/3Q MC = P = Q/2 + 2 Suppose there is a negative externality of $5 per unit in this market that is not corrected for by the market. What is the efficient amount of production/consumption? (Hint: Efficient level of production/consumption is where SMC=SMB)

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To find the efficient level of productionconsumption we need to equate the marginal social benefit M... View the full answer