11 Jul WHAT IS THE SOCIALLY EFFICIENT LEVEL OF OUTPUT?
You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 – 5Q. The external marginal cost of producing the product is MCE = 10Q, and the private cost is MCP = 20Q.What is the socially efficient level of output?Given these costs and market demand, how much output would a competitive industry produce? Given these costs and market demand, how much output would a monopolist produce?
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