2.1 Positive Externality Fish farms in Upcity feed their fish on the river, which also feeds Trouts caught by fishers in Downton. In that sense, amount of feeds provides a positive externality to Downton by 50$ per ton of raising their fish. What would be the equilibrium price and quantity in the Salmon market? What would be the socially optimal price and quantity of Salmon if the positive externality to Downton is accounted for?

Principles of Economics 2e
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Author:Steven A. Greenlaw; David Shapiro
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Chapter12: Environmental Protection And Negative Externalities
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Problem 41P: Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once...
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2.1 Positive Externality
Fish farms in Upcity feed their fish on the river, which also feeds Trouts caught by fishers in
Downton. In that sense, amount of feeds provides a positive externality to Downton by 50 per
ton of raising their fish. What would be the equilibrium price and quantity in the Salmon market?
What would be the socially optimal price and quantity of Salmon if the positive externality to
Downton is accounted for?
Transcribed Image Text:2.1 Positive Externality Fish farms in Upcity feed their fish on the river, which also feeds Trouts caught by fishers in Downton. In that sense, amount of feeds provides a positive externality to Downton by 50 per ton of raising their fish. What would be the equilibrium price and quantity in the Salmon market? What would be the socially optimal price and quantity of Salmon if the positive externality to Downton is accounted for?
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