Suppose the marginal social cost of television sets is 100, Ask an Expert

Economics

Suppose the marginal social cost of television sets is $100. This is constant and equal to the average cost of television sets. The annual demand for television sets is given by the following equation: Q = 200,000 - 500P

a. If television sets are sold in a perfectly competitive market, calculate the annual number sold. Under what circumstances will the market equilibrium be efficient?

b. Calculate the losses in well-being each year that would result from a law limiting sales of television sets to 100,000 per year.

c. Calculate the net loss in well-being that will result from a complete ban on television sets.

d. Draw a graph depicting the situtation described in this problem.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92198664

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