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?
Consider the same setting as in QUESTION 6, but now assume that the good is sold by a monopolist that produces using the same technology.
QUESTION: In this case, what is the difference between the optimal level of total consumption and the level of total consumption in equilibrium?
6 answers
QUESTION: In this case, what is the difference between the optimal level of total consumption and the level of total consumption in equilibrium?
Nothing?I need a clue in this one!
2750? right or wrong?
right for Q6!!!!!!!thankssssss
And for q7??It's my last chance...
How did you get to that number?I have 5000 (wrong solution) and I can't figure out q7 because i don't know the right value for q.opt (q.eq=625?)