Find the equation that represents the negative consumption externality in this case.
The market for a chemical pesticide can be modeled as given below, where Q is measured in thousands of pounds:
MSB = 20 – 0.4Q MPB = 20 – 0.3Q MSC = MPC = 12 + 0.1Q
The negative consumption externality is modeled as the MEB function, which in turn is found as (MSB ? MPB), or (20 – 0.4Q)– (20 – 0.3Q), or MEB = ? 0.1Q.
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