Question #5. (10 marks) The figure below shows the demand and supply of a certain product. Price 28 24 20 16 12 8 4 0 6

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Question 5 10 Marks The Figure Below Shows The Demand And Supply Of A Certain Product Price 28 24 20 16 12 8 4 0 6 1 (398.64 KiB) Viewed 8 times

Question #5. (10 marks) The figure below shows the demand and supply of a certain product. Price 28 24 20 16 12 8 4 0 6 12 MPB 18 24 30 Quantity per period MSC MPC MSB 36 42 48 a) If this depicts an unregulated market what would be the equilibrium price and quantity? b) If this product was taxed by an amount equal to the external costs, what would be the equilibrium price and quantity? c) Alternatively, if buyers of this product were subsidized by an amount equal to the external benefits, what would be the equilibrium price and quantity? d) Finally, if this product were both taxed and subsidized by an amount equal to the external costs and benefits, what would be the equilibrium price and quantity?