Consider the graph below, illustrating a positive externality.Price$69$45$33$21---1220a. What is the market equilibrium quantity?D₂= marginal social benefitPositive externality graph (text description)b. What is the efficient quantity?D, marginal private benefitwwwwwwQuantityc. What is the efficient price? Do not include the $ in your answer.d. If the government wants to use a Pigovian subsidy to bring about the efficient level of output, what should the value of the subsidy be (per unit)? Do not include the $ in your answer.

Externalities occur when there is an indirect impact on a party that is not directly related to the…

Consider the graph below, illustrating a positive externality. Price 569 $57 $45 $33 $21 28 36 Positive externality graph (text description b. What is the efficient quantity? a. What is the market equilibrium quantity? D₂-marginal social benefit D,= marginal private benefit Quantity c. What is the efficient price? Do not include the $ in your answer. d. If the government wants to use a Pigovian subsidy to bring about the efficient level foutput, what should the value of the subsidy be (per unit)? Do not include $ in your answer.

Consider the graph below, illustrating a positive externality. Price 569 $57 $45 $33 $21 28 36 Positive externality graph (text description b. What is the efficient quantity? a. What is the market equilibrium quantity? D₂-marginal social benefit D,= marginal private benefit Quantity c. What is the efficient price? Do not include the $ in your answer. d. If the government wants to use a Pigovian subsidy to bring about the efficient level foutput, what should the value of the subsidy be (per unit)? Do not include $ in your answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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