Consider the diagram below representing a market with an externality. What is the social surplus when the quantity is 7 as a result of a large subsidy? 10 MSC S/ MPC 7 6 4 3 D/MB 1 1 4 6. 7 8. 10 Q
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- Externalities: identify Positive or Negative Identify the solution to the Externalities Calculate the cost of externalities Calculate the deadweight loss P($) 10 6 7 20 30 OCommun U ASTRAL15963907 Su Home | Shöreline C E D Multiple Choice O Quantity Refer to the provided supply and demand graph for a product. In the graph, line S is the current supply of this product, while line St is the optimal supply from the society's perspective. One solution to this externality problem is to give consumers a subsidy of the amount FG per unit. tax producers by the amount DE per unit. give producers a subsidy of the amount AB per unit tax consumers by the amount EF per unit Seved SaveHow will the imposition of the chosen positive externality impact consumer surplus, producer surplus and total surplus in this scenario? (Maximum 30 words)
- Assume integer quantities. Assume the following supply and demand schedules for a perfectly competitive market without externalities. 1 3 4 6 MWTP $32.50 $27.50 $6 $25.50 $12 $20.50 $12.50 $7.50 $4.50 MC $2 $16 $21 $30 $32 What is total surplus in equilibrium? Round to two decimal places and do not include the currency symbol. If your answer is $1.125, enter 1.13.The figure above shows the marginal social cost and marginal social benefit curves for a chemical producing firm operating upstream from a hatchery. If the government imposes a tax of $20 per ton of emissions, the chemicals firm will emit MSC, MSB ($/ton) 100 MSC 90 800 70 60 50 40 30 20 MSB 10 2. 3. 6. 10 Quantity of Emissions (tons per day)ils Consider the market for electric cars. Suppose that a electric car manufacturing facility dumps Slouge in externality for those living downstream from the facility. Producing additional electric cars imposes a constant per-unit external cost of $420. The following graph shows the demand (private value) curve and the supply (private cost) curve for electric cars. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $420 per unit. 1400 1250 PRICE (Dollars per unit of electric cars) 1120 960 840 700 160 420 200 140 0 D 1 O O 3 QUANTITY (Units of electric cars) 0 Supply (Private Cost) Demand (Private Value) Social Cost The market equilibrium quantity is units of electric cars, but the socially optimal quantity of electric car production is units To create an incentive for the firm to produce the socially optimal quantity of electric cars, the government could impose a per unit of electric cars.
- 6) If Mark sells the profit-maximizing quantity, what would the deadweight loss created by the negative externality be?Side 19 A mine owner faces the following marginal cost (MC) function: MC= 100 +15*X Where X is tons of the mineral extracted The mining of the mineral has external costs. The marginal external cost (MEC) has the following function: MEC = 5*X Where X is the tons of the mineral extracted. The (marginal) price curve (PC) has the following function: PC= 600 -5*X Where X is tons of the mineral the bought What is the optimal extraction level in tons? Vælg én svarmulighed O 15 O 18 O 23 O 205) Suppose: i) the price of gasoline is $2 per gallon ii) current consumption is 400 (million) gallons per day iii) the elasticity of demand is -0.8 iv) retail provision of gasoline may be approximated as a constant cost industry v) there is an external cost of $0.5 per gallon of gas. Calculate deadweight loss associated with the externality. Draw a figure to illustrate.
- Supply curves for the production of oil in Sanaton are shown in the diagram below. Supply based on both private and private+social costs is shown. Answer the following questions based on the diagram. Supply (Private + Social) Supply (Private) VE (16000 $70 (22000,$59) Demand Price Quantity What is the equilibrium quantity when negative externalities of producing oil are not taken into account? What is the equilibrium price when negative externalities are not taken into account?BN12.2 (d) (e) Case: The market for dry cleaning is reflected by the demand and supply curves (Q is in thousands): Pa = 5-Q Ps= 2 + 2Q Producing dry cleaning creates ground water pollution with a constant marginal external cost of 1.2. Question: (d) What is the equilibrium price and quantity if the government decides to impose a per-unit tax of $1.20 is added to dry cleaning? (e) Does the tax cause a Pareto improvement? (Use the definition of a Pareto improvement to justify the answer.)Price ($) R H K W M SMC Demand PMC Quantity Refer to the graph above. What areals) represents the government revenue if pollution permits (sold to firms) are implemented to fix the externality? (hint: if there is no government revenue then answer: "zero")
