Graph the following supply and demand curve
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Graph the following supply and demand curve:
Supply: P = 10 + .4Q
Demand: P = 50 – .4Q
What is the equilibrium price and quantity?
- a. Suppose production of the good in question creates a negative externality equal to $8 per unit. Draw a new supply curve that represents the marginal cost to society. What is the socially optimal price and quantity?
- b. Calculate the net benefit to society if the government imposes a pollution tax of $8 per unit.
12 years ago
Graph the following supply and demand curve
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