What is the socially efficient level of output

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The external marginal cost of producing coal is MC external = 8Q while the internal marginal cost is MC internal = 6Q. The inverse demand for coal is given by P = 180 - 4Q.

What is the socially efficient level of output?

How much output would a competitive industry produce?

If the government taxed output at $2 per unit, what would a competitive industry produce?

Reference no: EM13697384

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