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Consider a Monopolist with a Private MC of $20 Per

Question 3

Multiple Choice

Consider a monopolist with a private MC of $20 per unit who faces a demand curve of P = 100 - q.There is also a negative consumption externality in the market of $40 per unit.What is the DWL in the market outcome?


A) DWL = $800
B) DWL = $1600
C) DWL = $200
D) DWL = $400
E) DWL = $0

Correct Answer:

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