Question:
An economy has three firms: X, Y and Z. Every unit of output that X produces creates a benefit of INR 700 for Y and a cost of INR 300 for Z. Firm Xβs cost curve is
\(πΆ(π_π) = 2π^2_X + 10\)
where πΆ represents cost and ππ is the output. The market price for the output of X is INR 1600 per unit. The difference between the socially optimal output and private profit maximizing output of firm X (in INR) is _____ (in integer).
An economy has three firms: X, Y and Z. Every unit of output that X produces creates a benefit of INR 700 for Y and a cost of INR 300 for Z. Firm Xβs cost curve is
\(πΆ(π_π) = 2π^2_X + 10\)
where πΆ represents cost and ππ is the output. The market price for the output of X is INR 1600 per unit. The difference between the socially optimal output and private profit maximizing output of firm X (in INR) is _____ (in integer).
\(πΆ(π_π) = 2π^2_X + 10\)
where πΆ represents cost and ππ is the output. The market price for the output of X is INR 1600 per unit. The difference between the socially optimal output and private profit maximizing output of firm X (in INR) is _____ (in integer).
Updated On: Oct 1, 2024
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Correct Answer: 100
Solution and Explanation
The correct answer is: 100 or 160,000(approx.)
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