Consider a Monopolist with a Private MC of $20 Per

question 3

Multiple Choice

Consider a monopolist with a private MC of $20 per unit who faces a demand curve of P = 100 - q.There is also a negative consumption externality in the market of $40 per unit.What is the DWL in the market outcome?

• A)DWL = $800
• B)DWL = $1600
• C)DWL = $200
• D)DWL = $400
• E)DWL = $0

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