1. The supply of paper is described by the following equation: Qs = 5,000P where Q is tons supplied per year and P is the price per ton. The demand is described by QD= 400,000 1,000P where QD is tons demanded per year. Because of the pollution associated with paper production, marginal external costs of $20 are associated with each ton of paper. Assuming that paper is sold in a competitive market, what is the market price? How many tons of paper will be produced per year at that price? What is the efficient annual output of paper? How can a corrective tax achieve efficiency?

1. The supply of paper is described by the following equation: Qs = 5,000P where Q is tons supplied per year and P is the price per ton. The demand is described by QD= 400,000 1,000P where QD is tons demanded per year. Because of the pollution associated with paper production, marginal external costs of $20 are associated with each ton of paper. Assuming that paper is sold in a competitive market, what is the market price? How many tons of paper will be produced per year at that price? What is the efficient annual output of paper? How can a corrective tax achieve efficiency?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Please help with part D
Sara has health insurance with a $2,000 annual deductible, a $3,000 stop loss provision and 80/20 coinsurance. Her first claim of the year is for a $10,000 medical bill. How much will she need to pay on this claim?
What are the excel formulas used?
Numeric question Your mortgage compounds interest annually at an interest rate of 3.1%. If your loan was for $700,000, how much interest did you pay after 7 years?
Fill in the blanks
I cannot understand anything written on this paper, would you please be able to type it?
Evaluate safety and security affecting early childhood development in Jamaica. Use references.
IMF loan condition and challenges in Bangladesh. Please write this in 1500 word. Also include the reference
Where did the 1/2 come from or what is it.
What is the Deferred Savings Plan?
What is the U.S 6 month interest rate?
High quality information gruarantees that every decisions made will be a successful one that benefits the organization