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• 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.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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
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
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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