The level of total consumption in equilibrium

Reference no: EM13191094

Consider a market in which consumption of the good being traded generates a positive externality.

There are 100 identical consumers, each with a utility function given by 1/2√q+m+√G, where G denotes the total level of consumption in the market.

The good is sold by competitive firms that produce with a constant marginal cost of 1 $/unit.
now assume that the good is sold by a monopolist that produces using the same technology.

In this case, what is the difference between the optimal level of total consumption and the level of total consumption in equilibrium

Reference no: EM13191094

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