Hw 5 #5 - will be where SB = TC or MB = MC MB = 10 – q MC...

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Hw 5 #5 a) The social benefit is the total benefit derived from the submarines. Since each individual benefit is valued at MB = (10 – q), the total benefit is 100 (10 – q). b) If submarines cost 100 each to produce, the tocially optimal quantity of marines
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Unformatted text preview: will be where SB = TC or MB = MC. MB = 10 – q MC = 100 MB = MC 10 – q = 100 Q = 90 submarines....
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This note was uploaded on 04/11/2009 for the course ARE 100B taught by Professor Whitney during the Fall '08 term at UC Davis.

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