**Graph Explanation:**The graph represents the relationships between price and quantity in a market, showing Supply, Demand, and Social Cost curves.- **X-axis (Horizontal):** Represents Quantity, labeled with Q1, Q2, Q3, and Q4.- **Y-axis (Vertical):** Represents Price.**Curves:**1. **Supply Curve:** Upward sloping from left to right, indicating that as the price increases, the quantity supplied increases.2. **Demand Curve:** Downward sloping from left to right, indicating that as the price decreases, the quantity demanded increases.3. **Social Cost Curve:** Parallel and above the Supply Curve, indicating the additional costs to society that are not captured by the market price.**Intersection Points:**- The Supply and Demand curves intersect between Q2 and Q3, indicating the market equilibrium without considering external costs.- The Social Cost curve intersects the Demand curve at Q1, indicating the socially optimal level of output when external costs are internalized.**Question:**Refer to Figure 10-2. If all external costs were internalized, then the market's output would be:- a. Q4.- b. Q2.- c. Q3.- d. Q1.

* ANSWER :- * The market output is = Q2. So the answer is OPTION b

Answered: Social Cost Supply Demand Q. QUANTITY…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume integer quantities. Assume the following supply and demand schedules for a perfectly competitive market. 4 $24.50 $16.50 $18 $13 2 3 5 6 MWTP $33.50 $28.50 $13.50 $10.50 $4.50 $33 MC $2 $7 $24 $29 Additionally assume a marginal external benefit of $10. What is the efficient quantity?
Only typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit. Pollution taxes…
Due to a firm generating external costs (a negative externality), the government decides to ________ the firm. In response, the firm will produce ________ units of output in order to continue maximizing profits and reach the new producer equilibrium. Question 4Answer a. tax; fewer b. subsidize; more c. tax; more d. subsidize; fewer
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B. Let’s consider the market for flour in a different town. Assume that it is efficient (i.e. that there are not external costs to producing flour, and no external benefits from consuming it). Price ($/lb) Quantity Supplied (thousands of lbs per day) Quantity Demanded (thousands of lbs per day) 1.5 8 14 2 9 13 2.5 10 12 3 11 11 3.5 12 10 4 13 9 What is the price and quantity of flour sold without government intervention. Graph this equilibrium. XXXX 2. Suppose that, alarmed by the inability of many poorer consumers to buy flour, the government institutes a $2/lb price ceiling. How much flour will suppliers wish to sell, and how much will buyers demand? How much flour will actually be sold? Show this outcome on the same graph you drew for question 1. XXXX 3. Describe, in one sentence each, three problems that this policy might create? Please do not simply copy down phrases from the textbook, but instead describe ways that…
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When producing a good generates external costs, the producing firm's supply curve will Multiple Choicea. be vertical.b. overstate the total cost of production.c. be above (to the left of) the total-cost supply curve.d. understate the total cost of production.
What would be the solution?
4. Suppose the supply curve of portable radio rentals in Golden Gate Park is given by P= 5+ 0.1Q and the demand curve is by P = 20 -0.2Q. a. If each portable radio imposes $3 per day in noise costs on others, by how much will the market equilibrium quantity exceed the socially optimal number of rentals? b. How would the imposition of a $3 per unit tax affect the efficiency in this market?
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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

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Social Cost Supply Demand Q. QUANTITY Refer to Figure 10-2. If all external costs were internalized, then the market's output would be a. Q4. b. Q2- O c. Q3. PRICE