Asked by Jenney
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^(1/2))+m +(G^(1/2)) 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.
QUESTION: What is the difference between the optimal level of total consumption minus the amount of total consumption generated by the market?
There are 100 identical consumers, each with a utility function given by (1/2)*(q^(1/2))+m +(G^(1/2)) 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.
QUESTION: What is the difference between the optimal level of total consumption minus the amount of total consumption generated by the market?
Answers
There are no AI answers yet. The ability to request AI answers is coming soon!
There are no human answers yet. A form for humans to post answers is coming very soon!