The following table lists the marginal cost and marginal private benefit of the electric car market: Quantity Marginal Cost 20000 10000 25000 15000 30000 20000 35000 25000 40000 30000 45000 35000 Marginal Private Benefit 40000 35000 30000 25000 20000 15000 In addition, it is estimated that the marginal external benefit from the consumption of electric cars is $10000 Given a supply shock, the price of gasoline has risen and the marginal private benefit has shifted by $10000. What quantity of cars would maximize social benefit? electric cars

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Chapter8: Market Failure
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The following table lists the marginal cost and marginal private benefit of the electric car market:
Quantity
Marginal Cost
20000
10000
25000
15000
30000
20000
35000
25000
40000
30000
45000
35000
Marginal Private Benefit
40000
35000
30000
25000
20000
15000
In addition, it is estimated that the marginal external benefit from the consumption of electric cars is $10000
Given a supply shock, the price of gasoline has risen and the marginal private benefit has shifted by $10000.
What quantity of cars would maximize social benefit?
electric cars
Transcribed Image Text:The following table lists the marginal cost and marginal private benefit of the electric car market: Quantity Marginal Cost 20000 10000 25000 15000 30000 20000 35000 25000 40000 30000 45000 35000 Marginal Private Benefit 40000 35000 30000 25000 20000 15000 In addition, it is estimated that the marginal external benefit from the consumption of electric cars is $10000 Given a supply shock, the price of gasoline has risen and the marginal private benefit has shifted by $10000. What quantity of cars would maximize social benefit? electric cars
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