What is the new equilibrium quantity

Reference no: EM132473265

Please answer each question correctly.

a. Given the equilibrium price of $10, what is the equilibrium quantity given the data above?

b. What if, instead of bags of oranges, the data in the two tables dealt with a public good like fireworks displays? If all the buyers free ride, what will be the quantity supplied by private sellers?

c. Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a $4-per-bag tax on sellers. What is the new equilibrium price?

d. What is the new equilibrium quantity?

e. If the new equilibrium quantity is the optimal quantity, by how many bags were oranges being overproduced before?

Reference no: EM132473265

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