1. Business
  2. Economics
  3. in the market for phil collins albums mpbmsbd172q3 mpc12q and...

Question: in the market for phil collins albums mpbmsbd172q3 mpc12q and...

Question details

In the market for Phil Collins albums MPB=MSB=D=17-2q/3. MPC=1+2q and there is a negative production externality of $8 per album produced. (suppose other musicials hear the music and are negatively influenced to make similar music)

a) what is the MSC equation

b) graph MPB, MSB, MPC, and MSC

c) what is the market outcome (q^m and P^m)

d) show part (c) on graph

e) what is the efficient outcome? (q* and p*)

f) show answer from part (e) on graph

g)what should be the PIgouvian tax on the Phil Collins albums to achieve economic efficiency (be specific and include a number)

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