The Following Equations Represent the MWTP Function and the Private

question 10

Essay

The following equations represent the MWTP function and the private MC function in the market for some good where an external cost like pollution results in damages of $6 per unit of the good produced:
MWTP = 65 - 0.5Q^D
MPC = 2 + Q^S
Solve for the competitive market equilibrium output and the socially efficient level of output for this market.

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