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
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
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section: Chapter Questions
Problem 8QP
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