The demand for cigarettes is given by Figure 1 P = 500 -0.2Q. Price 6002 Cigarettes are manufactured at a constant margi

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The Demand For Cigarettes Is Given By Figure 1 P 500 0 2q Price 6002 Cigarettes Are Manufactured At A Constant Margi 1 (101.06 KiB) Viewed 40 times

The demand for cigarettes is given by Figure 1 P = 500 -0.2Q. Price 6002 Cigarettes are manufactured at a constant marginal cost of 100 and sold in a competitive market. 550 What is the quantity of cigarettes sold in equilibrium? 5002 450- QPrivate = 2000 400 If cigarettes generate a marginal external cost of MEC = 0.05Q, what is the socially optimal level of cigarettes? 350 300- QSocially optimal = 1111 250 200 CD 150 100- 50- D 0 0 400 800 2000 2400 1200 1600 Output