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Suppose MPB = MPC = 10 at a Quantity of 100

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Suppose MPB = MPC = 10 at a quantity of 100 units,and MSB = MPC = 15 at a quantity of 120 units.Is the external benefit per unit less than $5,equal to $5,or greater than $5?


Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive.

Tariff

A tax imposed by a government on imported or exported goods.

Total Surplus

The sum of consumer and producer surplus, representing the total benefit to society from the production and consumption of goods or services.

Trade

The exchange of goods, services, or both between two or more parties.

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