3. The figure shows supply and demand for planting trees, based on private costs and privatevalue. Trees sequester carbon, meaning that they help counteract pollutants that contributeto climate change. Supply is given by P=(1/5)Q+4.Price of trees ($)16vlleiona sdi toode grind of gaitneleon oxibiadua Insamovog od bluoria doum woll >(laval lernitqo siooz - love pioiflo aniH) Sninaly sou to level insioiftoQuantity of trees80VanuiD=PV=SVa. Suppose that the carbon sequestration that results from planting a tree is worth $4.Graph the social cost curve for tree planting that accounts for the positive externalityindo of trees. O noitesubs sgo lovel yus 101 aftened steving sdh besoxs noitesubs02/20exibiadure of me 1944an2be agellos to innome insisifie yllisimmanoce siloiterubo ogollosto calvb. Ignoring the positive externality, how many trees will be planted?uba

Answered: 3. The figure shows supply and demand…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

3. The figure shows supply and demand for planting trees, based on private costs and private
value. Trees sequester carbon, meaning that they help counteract pollutants that contribute
to climate change. Supply is given by P=(1/5)Q+4.
Price of trees ($)
16
vlleiona sdi toode grind of gaitneleon oxibiadua Insamovog od bluoria doum woll >
(laval lernitqo siooz - love pioiflo aniH) Sninaly sou to level insioifto
Quantity of trees
80
Vanui
D=PV=SV
a. Suppose that the carbon sequestration that results from planting a tree is worth $4.
Graph the social cost curve for tree planting that accounts for the positive externality
indo of trees. O noitesubs sgo lovel yus 101 aftened steving sdh besoxs noitesubs
02/20
exibiadure of me 1944an2be agellos to innome insisifie yllisimmanoce sil
oiterubo ogollos
to calv
b. Ignoring the positive externality, how many trees will be planted?
uba

Expert Solution

Step 1

3) When a third party benefits from the production of a good, this is referred to as a positive externality in production. When it rains, for example, the construction of a railroad station could provide refuge for the homeless. If one company creates new technology, such as database software, that technology can be leveraged by other companies to achieve comparable productivity improvements. In a free market, a corporation will disregard third-party benefits and produce at the free market outcome, which is socially inefficient.

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions