Problem
There are two competitive markets in a society. The market demand in market1 and market 2 are p-100-qand p-80-q, respectively. The production cost of each producer in market 1 is ci(g)-60q. The production cost of each producer in market 2 is c2(g)-30q. A social project requires an investment of $500 and will change the production costs to ci(q)-40q and c2(q)-36q.
(a) What are the social benefit, social cost, and net social benefit of the project in market 1?
(b) What are the social benefit, social cost, and net social benefit of the project in market 2?
(c) Should the project be taken?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.