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:

Furans

A class of heterocyclic organic compounds, consisting of a five-membered aromatic ring with four carbon atoms and one oxygen.

Oxiranes

Another term for epoxides, which are three-membered cyclic ethers known for their reactivity and usefulness in synthesizing other compounds.

Oxetanes

Four-membered cyclic ethers with the formula C3H6O, known for their role in organic synthesis, particularly in polymer formulations and drug discovery.

Pyrans

A class of heterocyclic organic compounds characterized by a six-membered ring containing one oxygen atom and five carbon atoms.