This auxiliary lecture walks through two numerical examples of using supply and demand curves to analyze the effect of negative externalities and positive externalities (as in a public goods problem). Both the market equilibrium and the socially efficient solution are calculated and metrics of how they differ (such as deadweight loss) as well.
Whiteboard notes for this lecture can be found at: https://www.dropbox.com/s/rnanqam9km7lomy/LectureC7b-2020-10-13-Market_Analysis_of_Externalities-Study_Session.pdf?dl=0
No comments:
Post a Comment