The Supply (Private Marginal Cost) of producing product X is given by Qs = 10P and...

The Supply (Private Marginal Cost) of producing product X is given by Qs = 10P and the demand (Social Marginal Benefit/Private Marginal Benefit) is given by Qd = 2400 - 20P. Further, it has been determined that MEC = 30. Show enough work so that I can follow it.

a. Find the market (unregulated) price and quantity.

b. Determine the consumer, producer, and total surplus at the market equilibrium.

c. Determine the social optimum quantity

d. Determine the dead-weight loss at the market equilibrium

e. Determine the lost consumer surplus, lost producer surplus, and the external gain at the socially optimal quantity

f. Interpret the dead-weight loss.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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