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8. (11 point.) A factory produces gadgets and generates pollution that causes $50 worth of damage per unit produced. The marginal private cost (MPC) of producing a gadget is given by the equation MPC = 20 + 0.5Q, where Q is the quantity of gadgets produced. The demand for gadgets is given by P = 100-Q, where P is the per-unit price of gadgets. Calculate the socially optimal quantity of gadgets produced.

8. (11 point.) A factory produces gadgets and generates pollution that causes $50 worth of damage per unit produced. The marginal private cost (MPC) of producing a gadget is given by the equation MPC = 20 + 0.5Q, where Q is the quantity of gadgets produced. The demand for gadgets is given by P = 100-Q, where P is the per-unit price of gadgets. Calculate the socially optimal quantity of gadgets produced.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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8. (11 point.) A factory produces gadgets and generates pollution that causes $50 worth of damage per unit produced. The marginal private cost (MPC) of producing a gadget is given by the equation MPC = 20 + 0.5Q, where Q is the quantity of gadgets produced. The demand for gadgets is given by P = 100-Q, where P is the per-unit price of gadgets. Calculate the socially optimal quantity of gadgets produced.
Transcribed Image Text:8. (11 point.) A factory produces gadgets and generates pollution that causes $50 worth of damage per unit produced. The marginal private cost (MPC) of producing a gadget is given by the equation MPC = 20 + 0.5Q, where Q is the quantity of gadgets produced. The demand for gadgets is given by P = 100-Q, where P is the per-unit price of gadgets. Calculate the socially optimal quantity of gadgets produced.
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