Consider the market for fire extinguishersa why might they, Ask an Expert

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Consider the market for fire extinguishers

a. why might they exhibit possitive externalities?

b. draw a graph of the market for fire extinguishers, labeling the demand curve, the social-value curve, and supply curve, and the social-cost curve.

c. indicate the market equilibrium level of output. give an intuitive explanation for why these quantities differ.

d. if the external benefit is $10 per extinguisher describe a government policy that would yield the efficient outcome.

how do you do ALL of this?

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