You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 2Q. The external marginal cost of producing the product is MCExternal = 8Q, and the internal cost is MCInternal = 18Q. Instructions: Enter your responses rounded to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units
You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 2Q. The external marginal cost of producing the product is MCExternal = 8Q, and the internal cost is MCInternal = 18Q. Instructions: Enter your responses rounded to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 2Q. The external marginal cost of producing the product is MCExternal = 8Q, and the internal cost is MCInternal = 18Q.
Instructions: Enter your responses rounded to the nearest two decimal places.
a. What is the socially efficient level of output?
units
b. Given these costs and market demand, how much output would a competitive industry produce?
units
c. Given these costs and market demand, how much output would a monopolist produce?
units
d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output.
Instructions: For correct answers place a check mark.
check all that apply
Instructions: Enter your responses rounded to the nearest two decimal places.
a. What is the socially efficient level of output?
units
b. Given these costs and market demand, how much output would a competitive industry produce?
units
c. Given these costs and market demand, how much output would a monopolist produce?
units
d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output.
Instructions: For correct answers place a check mark.
check all that apply
- Nonrival consumptionunanswered
- Pollution taxesunanswered
- Pollution permitsunanswered
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