(Table 17.2) In an unregulated market, the quantity produced is socially optimal quantity of Quantity Private Marginal External Marginal Marginal Benefit Benefit Cost 0 1 200 150 50 2 175 150 100 3 150 150 150 4 125 150 200 5 100 150 250 6 75 150 300 3; $75; 6 O3; $150; 5 1; $150; 5 2; $100; 3 and a subsidy of per unit will achieve the

(Table 17.2) In an unregulated market, the quantity produced is socially optimal quantity of Quantity Private Marginal External Marginal Marginal Benefit Benefit Cost 0 1 200 150 50 2 175 150 100 3 150 150 150 4 125 150 200 5 100 150 250 6 75 150 300 3; $75; 6 O3; $150; 5 1; $150; 5 2; $100; 3 and a subsidy of per unit will achieve the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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…
500 450 The graph on the right may help in answering question 25 400 350 300 250 200 150 100 50 O 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 Quantity Demand MC Exter nality MC private MC Social A competitive tire manufacturing industry spews emissions into the air at47 per tire a marginal cost of 1.5-q, where q is the quantity of tires produced per month (in thousands). The industry marginal cost, excluding the cost of emissions (private marginal cost), is 4 + 4•q, expressed in $ per tire. The inverse demand curve for tires is p = 480 - 3-q, also expressed in $ per tire. In order to achieve the socially efficient level of tire production, which takes into account the optimal level of air pollution, the government levies a tax on the industry. What is the efficient pollution tax? $84 per tire $101 per tire $152 per tire Price
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A utility company is closely monitoring a new set of federal guidelines recently passed by the EPA (Environmental Protection Agency) regarding allowable green house (CO2) emission levels. In this example, the primary external factor of concern for the utility company in question. environment is the A Technological Regulatory (also political and legal) C Competitive D Economic
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Demand BA Quantity Refer to Externality graph above. Point A is the current equilibrium level of output of this product and point B is the socially optimal level of output for the society. S is the supply curve that includes private costs. St is the supply curve that includes public costs. The graph indicates that there is (arc): O a. positive externalities from product production. O b. spillover costs from the production of this product. Oc. spillover benefits to the production of this product. O d. an underallocation of resources to product production. Price %24
BN12.2 (b) (c) 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: (b) Calculate the unregulated price and quantity of dry cleaning? (c) Calculate the efficient price and quantity from a societal perspective?
O Completed 20 out of 20 All of these will lead to market failure EXCEPT if the good O is a public good. creates externalities. is a private good. O is a common property resource. LAPTOP LOGIN USERNAME: stude cer PASSWORD: Brow.
Exhibit 30-2 Price and Cost 0,0₂ b) ABE. Refer to Exhibit 30-2. If the exhibit represents a positive externality situation, the private cost of expanding output from Q₁ to Q₂ is the area of a) Q₁CBQ2. Cuantity c) Q₁AEQ₂- d) Q₁ABQ₂.
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2) 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?
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