The market for a chemical pesticide can be modeled as given below, where Q is measured in thousands of pounds:

            MSB = 20 – 0.4Q                    MPB = 20 – 0.3Q                    MSC = MPC = 12 + 0.1Q

            Use this model to respond to the following questions.

a.         Find the efficient output level for this market.

b.         Find the equation that represents the negative consumption externality in this case.

c.         Determine the value of a product charge that would achieve the efficient solution.

Answer rating: 100% (QA)

a To find the efficient output level for this market we need to find the quantity where Marginal Soc... View the full answer