Question: The table shows the demand for university education.
Price Quantity
(dollars per student) (students per year)
6,000 10,000
5,000 20,000
4,000 30,000
3,000 40,000
2,000 50,000
The marginal cost of educating a student is a constant $4,000 a year and education creates an external benefit of a constant $2,000 per student per year.
If all universities are public, calculate the tuition that will achieve the efficient number of students. How much will taxpayers have to pay?