Excessive consumption of soft drinks is positively correlated to the incidence of diabetes. Assume that the private total cost of production is PTC(Q)= Q^2 + 2Q. The social cost of soft drinks production is STC(Q)=11.5Q^2. The total benefit of soft drinks production is TB (Q)=50Q-Q^2. What quantity of soft drinks would be produced in a perfectly competitive market? What tax should the government impose to achieve the socially optimum quantity of soft drinks traded?
Excessive consumption of soft drinks is positively correlated to the incidence of diabetes. Assume that the private total cost of production is PTC(Q)= Q^2 + 2Q. The social cost of soft drinks production is STC(Q)=11.5Q^2. The total benefit of soft drinks production is TB (Q)=50Q-Q^2. What quantity of soft drinks would be produced in a perfectly competitive market? What tax should the government impose to achieve the socially optimum quantity of soft drinks traded?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Excessive consumption of soft drinks is positively correlated to the incidence of diabetes. Assume that the private total cost of production is PTC(Q)= Q^2 + 2Q.
The
The total benefit of soft drinks production is TB (Q)=50Q-Q^2.
What quantity of soft drinks would be produced in a
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