What is economic intuition behind such comparison results

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Quantity demand (Qd)=120-2p.

Quantity supplied (Qsp)=20+30P.

QUANTITY SUPPLIED (Qss)=-30+3P

1) If no government intervention and the firms only consider their private MC. Find the equilibrium price and quantity.

2) If firms to act socially responsibly and consider the social marginal cost, what is the equilibrium price and quantity.

3) Sketch the results of 1) and 2) in one diagram with clear label.

4) How do the equilibrium prices and quantities in the two scenarios compare with each other? What is the economic intuition behind such comparison results?

Reference no: EM13839364

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