Consider the market where demand is p10-2q and supply is

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Consider a market where demand is p=10-2Q and supply is p=Q/2. There is a consumption positive externality of $2.50/unit of consumption.

Calculate the market equilibrium.

Calculate the total surplus (the sum of producer and consumer surplus).

How can government increase the total surplus?

Impose the program you indicated in part C and calculate the total surplus.

Reference no: EM13395617

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