he Keurig pod industry produces one cup of coffee with a constant marginal $4 using a small plastic disposable pod to dispense one serving of ground co eans for brewing. The market demand for the Keurig pods is given by P = 22 his industry also produces excess waste in the form of the empty plastic Keur od. These costs are represented by the marginal external cost function, MEC: 2Q. What is the optimal (efficient) quantity of Keurig pods from a societal

he Keurig pod industry produces one cup of coffee with a constant marginal $4 using a small plastic disposable pod to dispense one serving of ground co eans for brewing. The market demand for the Keurig pods is given by P = 22 his industry also produces excess waste in the form of the empty plastic Keur od. These costs are represented by the marginal external cost function, MEC: 2Q. What is the optimal (efficient) quantity of Keurig pods from a societal

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The figure below shows the national market for mopeds in a small country. Dd and Sd are the domestic demand and supply curves of mopeds, respectively. Initially, the country's government has a tariff on imports of mopeds. Price S800 $750 0 03 06 Marginal External Benefit $140 $125 0 1.2 14 0.3 0.6 Sa The figure below shows the marginal external benefit curve (MEB) of the country from the production of domestic mopeds. -Domestic price line after tariff World price line DA Quantity (Millions of mopeds per year) MEB Quantity (Millions of mopeds per year) What will be the impact on the national well-being if, instead of imposing a tariff of $50 per unit, the government provides a subsidy of $50 per unit to the domestic manufacturers of mopeds?
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In an economy in which resources can move among industries with relative ease, a car. "in an ecsting to maximize short-term profits will sow the seeds of its own destruction. Explain.
Can externalities affect the allocation of resources by a perfectly competitive industry?
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A chemical company can produce Q units of a chemical H, with marginal costs of MC = 9 + Q, and can distribute the chemical at marketing marginal costs of MC = 1. The demand for H is given by P = 30 - 1.5Q. If an external market exists where H can be bought or sold without marketing expenses for $13, how much H should the firm produce? 4 units 10 units 7 units 5 units 0 units
2. A perfectly competitive market exists for almonds. Demand for almonds is Q= 200 – P where P is the price of almonds and Q is the total quantity of almonds. The private total Q? The production of almonds cost for the unregulated market is C 50 + 80Q + Q² First, solve for the 2 creates an externality where the total external cost is E = Pigouvian tax (per unit of output of almonds) that results in the social optimum. Suppose that one company, MegaAlmonds, becomes a monopolist in the production of almonds. What is the optimal tax that should be placed on the almonds in this case?
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Setup Suppse that the Demand and Supply for Electricity is given below. The production of electricity has a negative externality. Demand: QD= 9.875 -0.125P Supply: QS= 4P -19 Inverse Demand: P=79-8QD Inverse Supply: P=4.75+0.25QS Marginal Spillover Cost: MSPC= 9.5 +Q 1) Determine the Efficient Quantity. 2) Calculate the Deadweight Loss from Externality. 3) Calculate Optimal Pigovian Per Unit Tax 4) Calculate Tax Revenues Market Price: $7.00 Market Quantity: 9
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3) A chemical company can produce Q units of a chemical H, with marginal costs of MC = 9 + Q. and can distribute the chemical at marketing marginal costs of MC = 1. The demand for His given by P = 30-1.5Q. If an external market exists where H can be bought or sold without marketing expenses for $13, how much H should the firm produce? 00 units 4 units 05 units 07 units 10 units
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