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QUESTION
Sheet1 Demand = 7,000 - 5p Pollution cost of .10 cents Supply = -2,000 + 10p Pollution cost of .
The perfectly competitive industry demand and supply functions for a special type of computer memory chips are repectively, Qd = -7,000 - 5P and Qs = -2,000 + 10P where P is dollar. The production computer chip, however, results in a pollution cost of 10 cents. What is the socially optimal price?
