Q. P = $130 - $0.000125Q
MR - $130 - 0.00025
Fixed development cost = $600,000
Marginal costs are $63 per unit.
Calculate output, price, total revenue and total profit at revenue maximizing activity level and n at profit maximizing level (present each with relevant diagrams).
Q. reason government has to step in and "internalize" benefit and cost externalities are because people are basically selfish. Do you agree?