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4 votes
Imagine a market where there is a negative consumption externality. The private inverse demand function for the good is PD,p = 11 - 2QD,p. The social inverse demand function that accounts for the negative externality is PD,s = 8 - 2QD,p. The (social and private) inverse supply function is PS = 2 + QS. What is the social optimum (as opposed to the market equilibrium) quantity for the good?

1 Answer

6 votes
The answer is…………. Okay so first with the
answered
User WorldIsRound
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