Microeconomics Externalities Question The Demand For Gummy Bears Is Given By Q

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Microeconomics – Externalities Question

the demand for gummy bears is given by Q = 200 – 100P and these confections can be produced at a constant marginal cost of $0.50.

a. how much will sweet tooth inc be willing to pay in bribes to obtain a monopoly concession from the government for gummy bear production?

b. do the bribes represent a welfare cost from rent seeking?

c. what is the welfare cost of this rent seeking activity?

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