QUESTION 29. The demand curve for electricity is D(p) = 120 p. The
marginal cost of electricity production is MC1(q) = 20 + q. The marginal
cost of pollution due to electricity production is MC2(q) = 3q. Find the
competitive equilibrium output and the social optimum output.
(a) 50; 20
(b) 50; 30
(c) 60; 20
(d) 60; 30
Answer: (a)
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