Bill was a rancher and owned 500 sheep. Vandals cut a hole in the fence that kept Bill’s sheep in his pasture and 200 sheep escaped from the hole. The….
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Discuss actions the government could take to induce firms in this industry to produce the socially efficient level of output.
You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 – 5Q. The external marginal cost of producing the product is MCE = 10Q, and the private cost is MCP = 20Q.What is the socially efficient level of output?Given these costs and market demand, how much output would a competitive industry produce? Given these costs and market demand, how much output would a monopolist produce?
