y y 1. The demand curve for pizzas is p = 20 – 5,000 and the supply curve is p = 4+ 5,000 y The marginal external cost from production of pizzas is MEC (y) 10,000 (i) Find the competitive equilibrium price and quantity. (ii) Find the socially optimal quantity. (iii) Find the equilibrium price and quantity when a per-unit tax equal to t is imposed on suppliers.
y y 1. The demand curve for pizzas is p = 20 – 5,000 and the supply curve is p = 4+ 5,000 y The marginal external cost from production of pizzas is MEC (y) 10,000 (i) Find the competitive equilibrium price and quantity. (ii) Find the socially optimal quantity. (iii) Find the equilibrium price and quantity when a per-unit tax equal to t is imposed on suppliers.
Chapter14: Environmental Economics
Section: Chapter Questions
Problem 11SQ
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