No SPAM!! ONLY answer full STEP by STEPsolution BY HAND . Why option C is true?Costs,Benefits €MNPBМЕСТаx tQpOutputTo internalize the external cost, the authorities have established pollution Tax 1 (per unit ofpollution). Which one of the following statements is true?a. Tax t is the Pigouvian pollution tax (as per this Figure).b. Tax t has been set too low and as a result leads to under-production.Tax t has been set too low and leads to over-production with marginal external cost d,that is higher than the optimum level.d. Tax t has been set too high and is leading to over-production with marginal externalcost d, that is higher than the optimum level.Why option C is true?

Socially optimum equilibrium is where marginal net private benefit is equal to marginal external…

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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 (a) 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: (a) Sketch a graph that shows the Dsoc, Spriv, Ssoc, Qopt (societal perspective) and DWL in an unregulated market (No need to label the values in the graph)?
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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Only typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit. Pollution taxes…
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Externalities: Suppose the daily inverse demand curve for gasoline in Portland is given by P = $100 – Q, the MC = 1.5Q, and the EMC = 1.5Q. Q is measured in thousands of gallons of gasoline per day. a. Graph the demand, marginal cost, and external marginal cost functions. b. How many gallons will be consumed per day if gasoline consumers do not consider the EMC of gasoline? c. How many gallons of gasoline will be consumed per day if gasoline consumers consider the EMC.
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.
By imposing a tax on the production of electricity equal to the cost of acid rain, the government will cause electric utilities to internalize the externality. As a consequence, the cost of the acid rain will become a OA. social cost borne by the public, and the demand curve for electricity will shift down. OB. social cost borne by the public, and the demand curve for electricity will shift up. C. private cost borne by the utilities, and the supply curve for electricity will shift down. D. private cost borne by the utilities, and the supply curve for electricity will shift up. Question Viewer
Explain why, in the absence of governmental environmental regulation, competitive markets overproduce goods whose production involves the creation of negative externalities. Provide an example of a good that generates a negative externality.
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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.

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