Price of pizza rolls ($)1651413DMSB)121110DmarketS(MPC)0123 4568 9 10 11 12 13 14Quantity of pizza rolls2. In the diagram above, is there a positive or negative externality? How do you know?3. What is the market equilibrium? Calculate consumer and producer surplus at the market equilibrium.1. What is the socially efficient price and quantity? Calculate consumer and producer surplus at the sociallyoptimal price and quantity.5. What advice would an economist give in this situation?6. I will reroll.

Solution 2)To determine if there's a positive or negative externality, we need to assess whether the…

Answered: Price of pizza rolls ($) 1 6 5 14 13…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 2CQQ

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Similar questions

Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Fe and Qe. On the graph, shade in the deadweight loss at the market output.
Table 12.12, shows the supply and demand conditions for a firm that will play trumpets on the streets when requested. QS1 is the quantity supplied without social costs. QS2 is the quantity supplied with social costs. What is the negative externality in this situation? Identify the equilibrium price and quantity when we account only for private costs, and then when we account for social costs. How does accounting for the externality affect the equilibrium price and quantity?
Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and output. a. Assuming that the production of televisions generates external costs, illustrate the effect of the producers being forced to pay a tax equal to the external costs generated, and indicate the equilibrium output. b. If instead of generating external costs, television production generates external benefits, illustrate the effect of the producers being given a subsidy equal to the external benefits generated, and indicate the equilibrium output.

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