Midterm-ExCrdt-Spring2014

21 12 3 b mark the free market equilibrium quantity

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Unformatted text preview: 12 3 B) Mark the free market equilibrium quantity of paper production with a RECTANGLE. C) Mark the socially optimal quantity of paper production with a STAR. D) Shade in and label the dead weight loss on the figure. 5. For hiring a band for your house party, you and your nine friends each have a willingness to pay of P = 12 - Q/5 where P is in $ and Q is in minutes. The cost of hiring the band is P = ½ Q. The concert is a shared public good among you and your fiends. A) How long will the concert be in free market equilibrium? B) What would the socially optimal concert length be for all ten of you?...
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This document was uploaded on 03/25/2014 for the course ECON 328 at Wisconsin Milwaukee.

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