The demand for cement is given by P= 40 - 8Q, where P is the unit price in kroner (SEK) and Q is quantity demanded (measured as tons of cement per day). A cement industry characterized by perfect competition has a short-run supply function given by P=4+Q. (Note that 4+ Q is the industry's marginal cost) 5. 5c Now suppose that the manufacture of cement creates environmentally hazardous waste that is discharged into the immediate area and causes other actors costs (denoted by MCE). These amount to SEK 1,8 per ton of cement produced (so MCE= 1,8). Calculate it socially optimal equilibrium.

The demand for cement is given by P= 40 - 8Q, where P is the unit price in kroner (SEK) and Q is quantity demanded (measured as tons of cement per day). A cement industry characterized by perfect competition has a short-run supply function given by P=4+Q. (Note that 4+ Q is the industry's marginal cost) 5. 5c Now suppose that the manufacture of cement creates environmentally hazardous waste that is discharged into the immediate area and causes other actors costs (denoted by MCE). These amount to SEK 1,8 per ton of cement produced (so MCE= 1,8). Calculate it socially optimal equilibrium.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.1P: A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new...

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