Answer to Question #311906 in Microeconomics for Kate

Question #311906

Consider a profit maximizing firm whose total cost function is given as TC=Q2 +


20Q, consumers of the firm’s products derive benefits from the good according to the


function MB=500 – 12Q. Production of the product has negative effects on the


environment approximated at Ksh. 300 per unit.


(i) Determine the efficient level of output for the firm without government intervention

1
Expert's answer
2022-03-20T19:06:23-0400

Finding Q with the social cost of 300

"MSB= MSC"

"500-12Q = 300"

"12Q=200"

"Q = \\frac{200}{12}"

"Q= 16.67"

This is the efficient output without government intervention


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