Question 25, 15.3 Additional Problem 25(algo)The graph shows the demand for university education. The marginal cost of educating astudent is a constant $5,000 a year and education creates an external benefit of a constant$1,000 per student per year.If all universities are public, calculate the tuition that will achieve the efficient number ofstudents.How much will taxpayers have to pay?...Draw the marginal social cost curve. Label it MSC.Draw the marginal social benefit curve. Label it MSB.Draw a line that shows the tuition that schools charge to achieve the efficient number ofstudents. Label it Tuition.8.0-7.0-6.0-5.0-4.0-3.0-2.0-1.0-Price and cost (thousands of dollars per student per yeaD=MB20 30 40 50 60 70 80Students (thousands per year)>>> Draw only the objects specified in the question.0.0+010oLySav-

Socially efficient output, also known as allocative efficiency,, also known as allocative…

The graph shows the demand for university education. The marginal cost of educating a student is a constant $5,000 a year and education creates an external benefit of a constant $1,000 per student per year. If all universities are public, calculate the tuition that will achieve the efficient number of students. How much will taxpayers have to pay?

The graph shows the demand for university education. The marginal cost of educating a student is a constant $5,000 a year and education creates an external benefit of a constant $1,000 per student per year. If all universities are public, calculate the tuition that will achieve the efficient number of students. How much will taxpayers have to pay?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 2.5P

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