Essentials of Economics 8th Edition by Bradley Schiller

تمرين 13

Assume the market demand for cigarettes is as follows:
Suppose further that smoking creates external costs valued at 50 cents per pack.
( a ) Draw the social and market demand curves.
( b ) At $3 per pack what quantity is demanded in the market?
( c ) What is the socially optimal quantity at that price?
( d ) How can the optimal quantity be attained?