1. Business
  2. Economics
  3. 3 the demand in a market is q p 1503p...

Question: 3 the demand in a market is q p 1503p...

Question details

3. The demand in a market is Q (P) 150-3P. The supply in the market is QS(P)- 3P- 30 (a) Find the competitive equilibrium in the market (P*, Q*) (b) Determine the levels of Consumer, Producer and Total Surplus in the competitive equilibrium (c) Consumption of the good leads to a negative externality. The external marginal benefit function is mbeQw . Draw a graph that shows the Demand, Supply and the Social Marginal Benefits. where measures units consumed in the market (d) Calculate the external costs associated with the competitive equilibrium (e) Find the socially optimal level of output in the market, Q50.

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution