• The demand for a good is QD = 160-2P with P being the price and QD denoting the quantity demanded. The supply for the good is Qs = -40 + 2P with Qs representing the quantity supplied. The production of the good creates a marginal external cost P = Q. • Q6. Determine the equilibrium quantity in the absence of any regulation. • Q7. Determine the consumer surplus in the absence of any regulation. • Q8. Determine the producer surplus in the absence of any regulation. • Q9. Determine the total external cost in the absence of any regulation. • Q10. Determine the efficient (or social) equilibrium quantity. • Q11. Determine the deadweight loss associated with the negative externality.
• The demand for a good is QD = 160-2P with P being the price and QD denoting the quantity demanded. The supply for the good is Qs = -40 + 2P with Qs representing the quantity supplied. The production of the good creates a marginal external cost P = Q. • Q6. Determine the equilibrium quantity in the absence of any regulation. • Q7. Determine the consumer surplus in the absence of any regulation. • Q8. Determine the producer surplus in the absence of any regulation. • Q9. Determine the total external cost in the absence of any regulation. • Q10. Determine the efficient (or social) equilibrium quantity. • Q11. Determine the deadweight loss associated with the negative externality.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Last 3. Parts are wrong please don't do like this i trust on you and you are giving me wrong answer PLz give me correct answer for last 3 parts plz
![• The demand for a good is QD = 160-2P with P being the price and Qp
denoting the quantity demanded. The supply for the good is Qs = -40 +
2P with Qs representing the quantity supplied. The production of the good
creates a marginal external cost P = Q.
• Q6. Determine the equilibrium quantity in the absence of any regulation.
• Q7. Determine the consumer surplus in the absence of any regulation.
Q8. Determine the producer surplus in the absence of any regulation.
• Q9. Determine the total external cost in the absence of any regulation.
Q10. Determine the efficient (or social) equilibrium quantity.
Q11. Determine the deadweight loss associated with the negative
externality.
●
31](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F86312609-a27e-4f25-b5c2-0d6affa207a5%2Faa48561a-c37d-4a72-8033-477bcd9150a5%2F94y6l1o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:• The demand for a good is QD = 160-2P with P being the price and Qp
denoting the quantity demanded. The supply for the good is Qs = -40 +
2P with Qs representing the quantity supplied. The production of the good
creates a marginal external cost P = Q.
• Q6. Determine the equilibrium quantity in the absence of any regulation.
• Q7. Determine the consumer surplus in the absence of any regulation.
Q8. Determine the producer surplus in the absence of any regulation.
• Q9. Determine the total external cost in the absence of any regulation.
Q10. Determine the efficient (or social) equilibrium quantity.
Q11. Determine the deadweight loss associated with the negative
externality.
●
31
![Given:
Demand: Q=160-2P
Supply: Q=-40 +2P
External Cost: P = Q
Part A
Without regularization, the market equilibrium
condition is:
=> Demand = Supply
=> 160-2P = -40 +2P
=>4P=200
=> P = 50
From the demand curve : Q=160-2P=160-2*50=
160-100=60 (equilibrium quantity) - it is
corresponding to point A in the diagram below
Part B
without regulation, Consumer surplus is given by
the area ABC
= (1/2)*60*(160-50) = 3300 (ans.)
Part C
Without regulation, the producer surplus is given
as:
= (1/2)*60 (50-20) = 900 (ans.)
Price
160 B
50
20 P
Solution
Part A: 60
Part B: 3300
Part C: 900
A
X
60
$1
D1
Quantity
Part D
As the equilibrium output without government
regulation is 60 units
And as the total external cost: P = Q = 60
Hence total external cost in the absence of any
regulation is 60
Part E
To get the efficient equilibrium quantity, we have:
MSC (marginal social cost) = MB (marginal
benefits)
MSC MPC + MEC
MPC: Marginal private cost given by the S1 curve
MEC: P = Q
=>MSC = (20 +0.5Q)+Q=20+1.5Q
MB: this is given by the demand curve,
=> Hence equilibrium with regulation is:
= 20 + 1.5Q = 80 - 0.5Q
=>2Q=60
=>Q=30 units (efficient equilibrium quantity)
From the demand function:
>P=80-0.5Q=80-0.5*30=65
Part F
In the graph we have the MSC curve. And this line
intersects the demand curve at point B where we
have equilibrium price as 65 and equilibrium
quantity as 30 units (this is derived in part E)
Corresponding to Q = 30 units, MPC = 20 +0.5Q =
20+0.5*30=35
The dead weight loss is given by the area:
= (1/2)*(60-30)*(65-35)
= 450 (ans.)
Price
100
65
50 C
35
20 D
MSC
$1
DI
Quantity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F86312609-a27e-4f25-b5c2-0d6affa207a5%2Faa48561a-c37d-4a72-8033-477bcd9150a5%2Fel3l2ha_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Given:
Demand: Q=160-2P
Supply: Q=-40 +2P
External Cost: P = Q
Part A
Without regularization, the market equilibrium
condition is:
=> Demand = Supply
=> 160-2P = -40 +2P
=>4P=200
=> P = 50
From the demand curve : Q=160-2P=160-2*50=
160-100=60 (equilibrium quantity) - it is
corresponding to point A in the diagram below
Part B
without regulation, Consumer surplus is given by
the area ABC
= (1/2)*60*(160-50) = 3300 (ans.)
Part C
Without regulation, the producer surplus is given
as:
= (1/2)*60 (50-20) = 900 (ans.)
Price
160 B
50
20 P
Solution
Part A: 60
Part B: 3300
Part C: 900
A
X
60
$1
D1
Quantity
Part D
As the equilibrium output without government
regulation is 60 units
And as the total external cost: P = Q = 60
Hence total external cost in the absence of any
regulation is 60
Part E
To get the efficient equilibrium quantity, we have:
MSC (marginal social cost) = MB (marginal
benefits)
MSC MPC + MEC
MPC: Marginal private cost given by the S1 curve
MEC: P = Q
=>MSC = (20 +0.5Q)+Q=20+1.5Q
MB: this is given by the demand curve,
=> Hence equilibrium with regulation is:
= 20 + 1.5Q = 80 - 0.5Q
=>2Q=60
=>Q=30 units (efficient equilibrium quantity)
From the demand function:
>P=80-0.5Q=80-0.5*30=65
Part F
In the graph we have the MSC curve. And this line
intersects the demand curve at point B where we
have equilibrium price as 65 and equilibrium
quantity as 30 units (this is derived in part E)
Corresponding to Q = 30 units, MPC = 20 +0.5Q =
20+0.5*30=35
The dead weight loss is given by the area:
= (1/2)*(60-30)*(65-35)
= 450 (ans.)
Price
100
65
50 C
35
20 D
MSC
$1
DI
Quantity
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