A market has the demand function Q-300-2P and the supply function Q-P-15. Production creates a positive externality of 12…

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A market has the demand function Q-300-2P and the supply function Q-P-15. Production creates a positive externality

of 12 per unit. (Round answers to 2 decimal places as necessary)

What are the privately optimal equilibrium quantity and price?

Q-

P.M What are the price elasticities of demand and supply at the privately optimal equilibrium?

Price elasticity of demand (e)

=

Price elasticity of supply (n) =

Which side of the market is more elastic?

What are the socially optimal quantity and price?

Q=

Р=

To achieve the socially optimal quantity, should the government implement a tax or a subsidy?

Of how much per unit?

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