The demand curve for steel ingot is P = 100 - 2Q, and the supply curve for steel ingot is P = 19 + Q where Q is million tons of steel ingot per year and P is dollars per ton. Assume that the production of steel ingot generates waste that is dumped into the river. If the external cost of this pollution can be valued at $6 per ton per year, private market equilibrium quantity of steel produced is ____________________________, but the socially optimal amount of steel is ________________________________.

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     27 million tons; 25 million tons.
      27 million tons; 24 million tons.
      25 million tons; 20 million tons.
      27 million tons; 20 million tons.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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27 million tons; 25 million tons.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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