Market demand is MWTP= 76 - 2Q. Market supply is MC = 12 + Q. Each unit transacted results in a $Q external cost. How many units does the market produce more than the efficient quantity?
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- Can you answer this?Please no written by hand solution In this question, the letter “A” denotes the last 4 digits of your student number (for example, if your student number is: 183405022, then A = 5022). The perfectly competitive market for coal in a particular region of Turkey is characterized by the following demand and supply curves: QD = 15000 − 300P and QS = −A + 200P. Moreover, the marginal external cost associated with the production of coal is given by the curve: MEC = Q/800. a) Compute the market equilibrium price and output for coal.b) Compute the socially efficient price and output for coal. (Hint: What is MPB, MPC, MSB and MSC?) c) Explain why the answers you calculated in parts (a) and (b) differ.d) Suppose that the government wants to implement a per-unit tax on coal production so that the socially efficient level of production is reached in the market. Write the MPC of the firm with including tax. What is the level of tax that leads to socially efficient output?Suppose Firm A is the anly producer in some market. You are given information about the market demand and marginal cost for Firm As product Firm A's market demand is given by: Q= 60 - P Firm A's marginal cost is given by: MC = 6+Q A) Calculate the profit-maximizing output for Firm A. B) Calculate the profit-maximizing price for Firm A. Calculate what would have been the socially efficient output level produced in this market.
- If an activity generates external costs, the decision makers generating the activity will: A be faced with its full costs. B be faced with no costs. C not be faced with its full costs. D be faced with excessive costs.A farmer is located next to the rancher. They face the following problem.Cattle graze on the farmer's fields and cause $30 worth of damage to corn each year. The rancher's business is worth $100 annually (not taking into account any crop damage). The farmer's business is worth $80 before the cattle trample the corn It would cost $10 to build a fence that would keep the cattle off the farmer's property. If the farmer is given property rights If the rancher is given property rights O A. the rancher will pay the farmer $30 in damages; the farmer will accept the $30 in crop damages B. the rancher will pay the farmer $30 in damages; the farmer will build the fence O C. the rancher will build the fence; the farmer will build the fence O D. the rancher will build the fence; the farmer will accept the $30 in crop damagesConsider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 24 - 2E_1 MAC_2 = 20 - E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = 2E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a cap and trade policy and sets the cap equal to the socially efficient level of emissions (E*_Agg). If firm 2 is initially grandfathered 5 permits, it will buy more permits. (Note: your answer can be positive or negative; if it is positive, the firm is buying additional permits; if it is negative, the firm sells permits. So, for example, an answer of -10 implies that the firm sells 10 permits)
- 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 unitsMB = 50 - 2A MC = A Draw a graph for conducting a benefit cost analysis using marginal analysis. Solve for the efficient level of abatement and calculate the net benefits. Solve for the deadweight loss present at A = 10.Which of the following is true of an unregulated market for barbecue if its production creates external costs? it creates a positive externality for vegetarians and animal lovers output exceeds the socially optimal level O SMC EMC O it produces the optimal quantity of barbecue
- Price $400 $320 $120 $2000 $3000 $4000 300 350 $6000 Marginal Social Cost Supply = MPC What is the dead weight loss at the market outcome? Demand = MB -MEC = $120 Thousands of Board FeetA 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 costsSuggest a relevant government policy in Trinidad and Tobago that would yield the efficient outcome and carefully explain the process through which the implementation of the government policy will lead to optimal outcome. (Maximum 30 words)
