Given: The external marginal cost of producing electricity is MCexternal = 6Q while the internal marginal cost is MCinternal = 4Q. The inverse demand for electricity is given by P = 120 – 2Q Using the given information: How much output would a competitive industry produce, and how much output would a monopoly produce? I) 12; 20II)15; 8III)15; 10IV)20; 15V)25; 10

Assume the following: The external marginal cost of producing electricity is MCexternal = 6Q while theinternal marginal cost is MCinternal = 4Q. The inverse demand for electricity is given by P =…

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