Price Qd Qs before Considering Pollution Cost Qs after Considering Pollution Cost $600 50,000 40,000 30,000 $650 45,000 45,000 35,000 $700 40,000 50,000 40,000 $750 35,000 55,000 45,000 $800 30,000 60,000 50,000 $850 25,000 65,000 55,000 $900 20,000 70,000 60,000 Refer to the above table. The externality created by the production of refrigerators was $100. However, once both the private and additional external costs were taken into consideration, the market price increased by only $50. If the external costs were $100 why did the price only increase by $50 when all costs were taken into account? Explain.
Price Qd Qs before Considering Pollution Cost Qs after Considering Pollution Cost $600 50,000 40,000 30,000 $650 45,000 45,000 35,000 $700 40,000 50,000 40,000 $750 35,000 55,000 45,000 $800 30,000 60,000 50,000 $850 25,000 65,000 55,000 $900 20,000 70,000 60,000 Refer to the above table. The externality created by the production of refrigerators was $100. However, once both the private and additional external costs were taken into consideration, the market price increased by only $50. If the external costs were $100 why did the price only increase by $50 when all costs were taken into account? Explain.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
| Qd | Qs before Considering Pollution Cost | Qs after Considering Pollution Cost | |
| $600 |
50,000 |
40,000 | 30,000 |
| $650 | 45,000 | 45,000 | 35,000 |
| $700 | 40,000 | 50,000 | 40,000 |
| $750 | 35,000 | 55,000 | 45,000 |
| $800 | 30,000 | 60,000 | 50,000 |
| $850 | 25,000 | 65,000 | 55,000 |
| $900 | 20,000 | 70,000 | 60,000 |
Refer to the above table. The externality created by the production of refrigerators was $100. However, once both the private and additional external costs were taken into consideration, the market price increased by only $50. If the external costs were $100 why did the price only increase by $50 when all costs were taken into account? Explain.
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