Consider the market for Dragonfire hot sauce sold in the US. The act of processing the chili peppers into the sauce creates a strong offensive odor in are surrounding the Dragon fire factory. As a result the marginal social cost and the marginal private cost of producing the sauce diverge, as seen on the graph below. $10 MSC MPC D 0 5 10 15 20 25 30 35 Quantity of Bottles (Thousands) a) In the absence of government intervention, how many bottles of hot sauce are produced in this market? (Please enter your answer with out the "thousands", ex. if the answer is 35,000, enter 35) b) What is the efficient amount of hot sauce produced in this market? c) If the government were to levy a tax on hot sauce. What is the appropriate per bottle tax that would lead this market to the efficient outcome? (Please enter only the value of the tax, do not add "per bottle" or "each" or anything like that) Price per Bottle $9 $8 $7 $6 S $4 $3 $2 SI

Consider the market for Dragonfire hot sauce sold in the US. The act of processing the chili peppers into the sauce creates a strong offensive odor in are surrounding the Dragon fire factory. As a result the marginal social cost and the marginal private cost of producing the sauce diverge, as seen on the graph below. $10 MSC MPC D 0 5 10 15 20 25 30 35 Quantity of Bottles (Thousands) a) In the absence of government intervention, how many bottles of hot sauce are produced in this market? (Please enter your answer with out the "thousands", ex. if the answer is 35,000, enter 35) b) What is the efficient amount of hot sauce produced in this market? c) If the government were to levy a tax on hot sauce. What is the appropriate per bottle tax that would lead this market to the efficient outcome? (Please enter only the value of the tax, do not add "per bottle" or "each" or anything like that) Price per Bottle $9 $8 $7 $6 S $4 $3 $2 SI

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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BN12.2 (b) (c) 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: (b) Calculate the unregulated price and quantity of dry cleaning? (c) Calculate the efficient price and quantity from a societal perspective?
No hand written solution Afirm has an industrial plant that emits pollutants into a town’s lake. The plant’s marginal abatement function is MAC= 200 – 0.5E and damages caused by its emissions are given by MD = 2E where emissions are in kg. per day. What is the socially efficient level of emissions from this plant? Illustrate this in a graph. As an incentive to reduce emissions to the socially efficient level, government offers to pay the firm for each kg. of emissions it abates per day from this plant. What subsidy per kg. should the government offer? If the plant abates to the socially efficient level of emissions, what total subsidy payment would the firm receive? Identify the area in your graph. How much better or worse off would the firm be compared to if it did no abating? Identify the area in your graph. What would be the net benefit to society if we pay the firm to reduce the plant’s emissions to the socially efficient level? Identify this area in your graph.
Refer to Figure. Which of the following statements is correct? Price 22 24 22 81 18 16 Social cost (private cost and external cost) Supply (private cost) Demand (private value) 120 160 Quantity a. The private cost of producing the 160th unit of output is $16 b. The social cost of producing the 160th unit of output is $22. c. d. The external cost of producing the 160th unit of output is $6. All of the above are correct.
Consider the market for fire extinguishers. d. If the external benefit is $10 per extinguisher,describe a government policy that would yield theefficient outcome.
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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
In the graph below, circle the efficient level of emissions.
Suppose that a firm’s emissions and Marginal Abatement Cost (MAC) data are summarized in thetable below. e MAC 0 200 10 180 20 160 30 140 40 120 50 100 60 80 70 60 80 40 90 20 100 0 a. If the price of a pollution permit is $100, how many permits will the firm need? Explain.b. Suppose that the price of a pollution permit increases to $120, how many permits will thefirm need? Explain.c. With this new price of $120, will the firm’s emissions increase or decrease? By howmuch? Explain.d. Can the firm sell any permits? If so, what is the revenue generated from permit sales?Explain.
Can I get help asap please The figure below shows the market for a chemical, of which the production causes certain negative externalities in the form of pollution. Define MCP = marginal private cost, MCS = marginal social cost, D = market demand, P = price, and Q = quantity.(a) If the market is competitive, what is the equilibrium price and quantity?(b) Is this equilibrium outcome socially optimal?(c) In terms of the areas denoted by A, B, and C, what is the deadweight loss to society if the market is competitive?(d) What can the government do to achieve the socially optimal level of pollution?