Suppose the inverse demand curve for paper is p 200

Economics

Suppose the inverse demand curve for paper is p = 200 - Q. The private marginal cost is MCp = 80 + Q while the marginal harm to the rest of society from gunk is MCg = Q.

a) What is the unregulated competitive equilibrium?

b) What is the social optimum? What specific tax per unit of output of gunk results in the social optimum?

c) What is the unregulated monopoly equilibrium?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M953373

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