Scenario 10-4 the Demand Curve for Fire Extinguishers Slopes Downward and the and the Supply

question 167

Essay

Scenario 10-4
The demand curve for fire extinguishers slopes downward and the supply curve for fire extinguishers slopes upward. The production of the 500^th fire extinguisher entails the following:
• a private cost of $10;
• an external cost of $0;
• a private value of $9;
• an external benefit of $3.
-Refer to Scenario 10-4. Is the socially-optimal quantity of fire extinguishers less than, equal to, or greater than 500? Explain.

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Definitions:

Cloudsourcing

Cloudsourcing combines "cloud computing" and "outsourcing," referring to the practice of obtaining services, computing resources, or infrastructure management from external providers through the internet.

Revamped Products

Products that have been significantly redesigned or updated with new features or improvements to meet current market demands.

Manufacturer

A company or person that produces finished goods from raw materials in large quantities for sale.

Risk

The potential for losing something of value or the exposure to danger, harm, or loss, often evaluated in decision-making processes.