Problem
Write the private MB of a flower purchaser as 15 - 3Q, where Q is the number of flowers purchased. Each flower generates 10 units of (marginal) external benefit. The marginal cost of flower production is 2Q.
Rounding to the nearest whole number if necessary:
a. What is the competitive equilibrium quantity?
b. What is the socially optimal quantity?
c. What is the DWL?