Solve for competitive market equilibrium output

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Reference no: EM131424748

The following equations represent the MWTP function and the private MC function in the market for some good where a negative externality (i.e., pollution) results in damages of $12 per unit of the good produced:

MWTP = 400 - Q^D

MPC = 55 + 0.5Q^S

Solve for the competitive market equilibrium output and the socially efficient level of output for this market. (Hint: Marginal Social Cost = Marginal Private Cost + Marginal External Cost, thus: MSC = MPC+MEC)

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Reference no: EM131424748

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