In an otherwise perfectly competitive market, yet with pollution and no government intervention,the market equilibrium quantity of pollution reduction is reached when:the social marginal benefits of reduction equal its social costs.the social marginal benefits of reduction equal its social marginal costs.the social marginal cost of reduction equals twice the marginal benefit of reduction.the social marginal benefits of reduction equal zero.pollution reduction is zero.

In the context of pollution reduction, the social marginal cost of reduction is the additional cost…

Answered: In an otherwise perfectly competitive…

In an otherwise perfectly competitive market, yet with pollution and no government intervention, the market equilibrium quantity of pollution reduction is reached when:

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

Q: The table below shows the demand for pollution permits to emit hydrocarbons in a particular…

A: Pollution tax assessment charges polluters for the harms their activities cause the climate and…

Q: About five decades ago, when The Environment Protection Agency was created about, it decided to…

A: Decades ago, the establishment of the Environmental Protection Agency (EPA) marked a pivotal moment…

Q: When an externality is present, the market equilibrium i

A: This concept can be described as the unintended side effects or influence of economic activity that…

Q: When students graduate from college, the external benefits that others in society receive are an…

A: Positive externality arises when social benefit exceeds private benefit. The society without…

Q: Suppose the market for plastic bag is represented by the following equations: Qd = 1000-2p Qs = -20…

A: Equilibrium is reached where the demand and supply are equal. The external cost creates inefficient…

Q: Coal-fired electric generating facilities supply kilowatt hours (kwh) of energy according to the…

A: Supply of energy represents Private Marginal Cost (PMC) of energy. Qs=50+P P=Qs-50 : PMC Private…

Q: Which of the following makes it less likely that private solutions to externalities will succeed?…

A: Externality refers to spillover effect of a good on third party which is not involved in the…

Q: M is a flow uniformly-mixing pollutant. Its release allows to generate marginal benefits B’(M)Actual…

A: The socially optimal level of pollution, M*, is the level at which the marginal benefit equals the…

Q: Efficiency in the presence of externalities

A: Efficiency cannot be achieved in the presence of externalities. Because in externalities someone is…

Q: How market equilibrium is found with Pollution Abatement Subsidy?

A: The equilibrium in market is determined where the social marginal cost is equal to the social…

Q: On 1 May 2020, an environmental tax on plastic bags was introduced in Sweden. The tax is 3 kronor…

A: Demand refers to the quantity of a commodity which the consumers are willing to buy at the…

Q: The “demand” (MB) curve for pollution abatement would be given by the pollution damages that could…

A: a. Here, a firm's cost and benefit of pollution are graphed. The MC curve is the marginal cost curve…

Q: The socially optimal level of emissions of most pollutants is zero. Select

A: Marginal Social Cost and Marginal Social Benefit: The addition in the total social cost when one…

Q: What is the main rationale behind marketable pollution permits?

A: Emissions trading or cap and trade is a market-based approach that is used by government to control…

Q: se that the private marginal cost for a product's (rice) consumption is by the MB curve (or MB = 360…

Q: Suppose instead that the government uniformly allocates tradable emissionís permits. What abatement…

A: Deadweight loss is a fundamental concept in economics, indicating the reduction in overall social…

Q: Which of the following types of private solutions to the externality of pollination has occurred in…

A: An externality is a cost or benefit incurred by a producer that is not financially incurred or…

Q: "Which of these is a positive externality? After measles vaccinations increase by 20%, the number of…

A: The unanticipated consequences of economic activity on those not directly involved in the…

Q: irms in a polluting industry can be classified in two groups: newer firms with a cleaner technology…

A: Given : Newer Örms Lower marginal cost : M CLA L = (1/2) aL Older Örms with dirtier :M CAH = aH…

Q: Consider a competitive market for single-use plastic bags. Market demand is given by P=15 - Q/500,…

A: Market equilibrium: At the market equilibrium we have demand equals to supply. Or at market…

Q: In the course of producing its output, a firm causes pollution. The government passes a law that…

A: An externality, also known as a spillover, occurs when a transaction between a buyer and a seller…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=8P and Market Demand…

A: Given Information: Market Supply : Q=8P Market Demand : Q=417-3P Negative Externality : $7

Q: a) What is meant by Pareto efficiency in economics? Explain. b) List two examples of market failures…

A: Dear student as you have posted multiple questions here, but we are allowed to answer only 1…

Q: Analyze the relationship between negative externalities and inefficient overproduction

A: A benefit or expense that occurs as a result of the producer's activity but is not borne by the…

Q: Firms in a polluting industry can be classified in two groups: newer firms with a cleaner technology…

A: Deadweight loss is a fundamental concept in economics, indicating the reduction in overall social…

Q: Describe aspects of environmental economics and ecological economics

A: Economics is a social It looks into how individuals, businesses, governments, and countries decide…

Q: An example of a positive externality is: a) the profit made from the sale of electric vehicles…

A: Externality refers to the cost or benefit on a third party that is not directly involved in it . A…

Q: Price and cost (thousands of dollars per student) 20 S = MC 16 12 MSB 8 MB 4 200 400 600 800 1,000…

A: The figure shows that there is an external which is represented as the difference between marginal…

Q: Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that…

A: External costs and benefits or externalities are the harmful/ beneficial side effects arise out of…

Q: Sulfur dioxide is a pollutant byproduct of nonrenewable electricity generation, resulting in a…

A: Externalities are side effects which are not accounted for by the market activities. or these…

Q: Pollution is an example of a externality. A) negative consumption B) Coasian C) positive consumption…

A: Externality is the cost or benefit incurred due to the consumption or production by one party whose…

Q: Why has supply and demand failed to prevent pollution

A: Supply: It refers to the goods and services available in the market for the people's purchase. The…

Q: Compare the emission fee vs. the cap-and-trade system to deal with an externality, in the presence…

A: Emission fee is the tax imposed on the pollution emitted in production of goods and services. It is…

Q: A set of perfectly competitive companies produce shoes. 1 pound of water pollution (WP) is released…

A: "Since you have asked a question with multiple sub-parts, we will solve the first three sub-parts…

Q: With rental rates exceeding $3,000 per square foot per year, retail space in Causeway Bay, Hong…

A: Town planning is an important aspect of urbanization. Unchecked heights of building and higher…

Q: If you are a firm owner who is operating in the perfect competitive market, you are producing…

A: Perfect competition: It refers to the competition in which the firms are of small numbers and all…

Q: Identify a negative externality

A: Externality is the negative or positive spillover by the consumer or producer which affects the…

Q: Market (inverse) demand for measles vaccine is given by P= 100-20. Market (inverse) supply for…

A: Given information: P = 100 - 2Q --------> Demand curve for vaccine P = 10 + 0.5Q ------------>…

Q: Firms in a polluting industry can be classified in two groups: newer firms with a cleaner technology…

A: The pigovian fee is an emission fee exactly equal to the aggregate marginal damage created by the…

Q: Suppose the equation for the demand curve in a market is P-100-1.5Qp, where Qn is the quantity…

Q: The table below shows the supply and demand conditions for a furniture factory that pollutes the…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: externalities

A: ‘Externality’ is a cost or benefit that a person or a community receives but they have no control…

Q: Can you explain why the following statement is false? The efficient level of a pollution-emitting…

A: The Marginal External Cost (MEC) of pollution is the extra expense incurred by society or third…

Q: ther it is known than each unit produced releases an extra 90.0 t of GI

A: The optimal level of pollution will lie where the social benefit from the last unit of pollution is…

Question

In an otherwise perfectly competitive market, yet with pollution and no government intervention,
the market equilibrium quantity of pollution reduction is reached when:
the social marginal benefits of reduction equal its social costs.
the social marginal benefits of reduction equal its social marginal costs.
the social marginal cost of reduction equals twice the marginal benefit of reduction.
the social marginal benefits of reduction equal zero.
pollution reduction is zero.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Definition of social marginal benefit and social marginal cost.

VIEW

Step 2: Explanation of correct answer:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

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

Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 11 - 2E_1 MAC_2 = 8.5 - E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per unit subsidy to abatement equal to $____. Answer:
Is zero pollution possible under a marketable permits system? Why or why not?
If positive externalities exist in a market, then OSocial cost is greater than private cost OSocial cost is equal to private cost OSocial cost is lower than private cost
Economics Question
The primary source of air pollution in the small town of Smokey, Nevada is a nearby steel mill. The local environmental agency has decided that the mill needs to reduce its emissions because the town's population is located directly downwind from it. Currently the agency is considering three different approaches to reducing pollution from the mill: a technology standard, an emission standard and an emission tax. Why might the owner of the mill prefer an emission standard to a technology standard that would produce the same level of emissions? a Because with emission standards the polluter is more flexible in selecting the technology that will minimize her abatement cost Ob. Because polluters usually try to stick to their existing technology O C. Because it has been proven to be easier to implement O d. Because polluters, as all producers are suspicious about new technologies
The marginal benefit of reducing pollution and the marginal cost of reducing pollution are given by the following equations: MB = -2U2 + 18, and MC = 2U2 + 2, where U is the number of units of pollution abatement. What is the optimal number of units of pollution abatement? A) o B) 1 C) 2 D) 3 E) 4
Explain the negative externalities by clarifying the drawing
A positive externality arises when a third party, outside the market transaction, fails to allocate resources efficiently Pays less for the good or service benefits from a market transaction pays a pollution tax to balance social costs
(a) Explain the difference between a positive externality and a negative externality and why each result in an equilibrium point that is not optimal for society. (b) which externality results in an equilibrium quantity that is higher than the optimal social quantity of a good? (c) how can the impact of the externality in part b be corrected?
Public wifi hotspots grant many external benefits on society: more equitable access to the internet, increased educational opportunities, and so on. Therefore, the market equilibrium quantity of public wifi hotspots does not equal the socially optimal quantity. The following graph plots the demand for public wifi hotspots (their private value), the supply of public wifi hotspots (the private cost of producing them), and the social value of public wifi hotspots, including both the private value and external benefits. Use the black point (plus symbol) to indicate the market equilibrium quantity. Next, use the purple point (diamond symbol) to indicate the socially optimal quantity.
The market for plasticans is perfectly competitive. Market Supply is givenby Q=4P and Market Demand is given by Q=368-2P. Each extra unit ofplastican produced creates a positive externality of $5. What is theefficient quantity? Efficient quantity is determined by setting Marginal Social Costs(=Marg. Pvt. Cost + Marg. External Cost.) equal to Marg. SocialCost=MWTP which is captured by the Demand curve
Problem 5 refers to the following setup: The demand curve in a market is Q = 6-P. Firm A and B are the only sellers, their marginal costs are constant at 2 and 3 respectively, and there is no fixed cost. They produce identical goods. 5. a) What is the socially efficient outcome? (Specify the quantity for each firm.) b) Find the quantity produced by each firm and the price under Cournot competition. c) What is each firm's profit under Cournot competition?