P = 16-.25Q MC 2+.25Q Production creates an external benefit equal to $2 per unit. What price and quantity maximize profit in this market? O28, $10 28, $9 O 24, $9 O 24, $10
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- 1. Discuss the merits of a proposal that the government should impose a tax or subsidy where a non-renewable resource is supplied monopolistically in order to increase the social net benefit. You may contextualize this to Fiji or to a current development that you may be aware ofNote:- 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.Suppose that the supply and demand schedules for a local electric utility are as follows:Price 17 16 15 14 13 12 11Quantity supplied 9 7 5 3 1 - -Quantity demanded 3 4 5 6 7 8 9The price is in cents per kilowatt hour (kWh), and the quantity is millions of kilowatt hours. The utilitydoes not operate at prices less than 13 cents per kWh.(a) Using graph paper and a ruler, or a computer spreadsheet or presentation program, carefully graphand label the supply curve for electricity.(b) On the same graph, draw and label the demand curve for electricity.(c) What is the equilibrium price of electricity? The equilibrium quantity? Label this point on yourgraph.(d) At a price of 17 cents per kWh, what is the quantity supplied? What is the quantity demanded? Whatis the relationship between quantity supplied and quantity demanded? What term do economists useto describe this situation?(e) At a price of 14 cents per kWh, what is the relationship between quantity supplied and quantitydemanded? What…
- 5. What will be the quantity demanded by country 1 from the rest of the world at a price of 2? (a) 6 (b) 9 (c) 12 (d) 186. The monthly demand for trotro rides in Kumasi, Ashanti depends on the price of a taxi ride, the price of a trotro ride, and the average monthly income of riders. Some consumers might choose to ride the taxi instead of the trotro, while other riders might use both forms of transportation to get to their final destination. The demand function for trotro rides is: Qd = 9,750 – 500P + 250Pj + 5INCOME, where Qd is the number of trotro rides demanded per month, P is the price of a ride, Pj is the price of a taxi ride, and INCOME is the average monthly income of riders. Suppose that P = $1.50, Pj = $4, and INCOME = $3,000. What is the monthly quantity of trotro rides demanded? What is the value of the cross-price elasticity of demand? Based on your answer, are taxi rides and trotro rides substitutes or complements? What is the value of the income elasticity of demand? Based on your answer, are taxi rides an inferior or a normal good?
- QUESTION 10 Suppose that a firm in a competitive market produces electricity by burning coal. The production process creates a negative externality of air pollution. The firm only cares about its private benefits and costs so it will produce a quantity where O the price of electricity it is paid equals the marginal private cost of producing electricity O the marginal value of electricity to society equals the marginal social cost to society the cost of the externality is maximized O the transaction costs of private bargaining are minimizedpossible Submit c The figure on the right shows the costs and benefits associated with wood pulp production. Without regulation the market will produce a price of Price (dollars per ton) tons of wood pulp at per ton. 1,100 MSC O A. 5; $700 1,000 O B. 3; $600 900 O C. 5; $1,100 800 O D. 3; $900 S=MC O E. 4; $900 700 600 D=MB 500 2 4. 4 Quantity (tons per week) NextQuantity Marginal of Total Cost of Pollution Cost Reduction Reduction 1 20 20 50 30 3 110 60 200 90 5 380 180 6 660 280 Use the cost information from the table for a firm creates pollution. If there is a pollution charge of $45 per unit, how much will the firm reduce its pollution? O 1 4 3.
- Internalizing a negative externality results in: an increase in consumer surplus and an increase in total surplus. Oa decrease in consumer surplus and an increase in total surplus. an increase in consumer surplus and a decrease in total surplus. Oa decrease in consumer surplus and a decrease in total surplus.Lighthouses are a good that is non-excludable and non-rival (i.e. a Public Good). Given there are currently 2 boats in the area and the marginal cost shown in gray. What is the Socially Optimal level of Lighthouses? 02 49 3 O t 05 Price ($) $80- $70- $60- $50 $40 $30- $20- $10- 0 0 Lighthouse Market 2 3 Lighthouses, QL Marginal Cost 5 MBA MBB 62) Use the figure below to answer the following questions. Price and cost (dollars per tonne of paper) MSC 15 MC 14 13 12 11 D = MSB %3D 30 40 50 60 70 Quantity of paper (tonnes) Figure 1 a) Refer to Figure 1 What is the unregulated equilibrium in the paper market? b) Refer to Figure 1 What is the marginal external cost in this market? c) Refer to Figure 1 What is needed to achieve the efficient output in the market?