Suppose a bread factory faces can sell bread to grocery stores on the “bread market” for 1 dollar per loaf, while it mak

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Suppose a bread factory faces can sell bread to grocery stores
on the “bread market” for 1 dollar per loaf, while it makes loaves
with cost function C(Q) = 5000 + 0.3Q + 0.002Q2 and Q is the number
of loaves produced in a week. As well, there is an externality due
to the smell of baking bread that affects the surrounding
neighborhood. The value (note: value, not cost) of this smell
externality is given by −20 + 0.15Q − 0.001Q2 . What is the total
social cost function of factory’s bread output and what does this
function tell us about the value (positive and negative) of urban
bread production? What is factory’s output of bread? What is the
socially optimal number of loaves produced by the factory