The figure below shows the market for a chemical, of which the productioncauses certain negative externalities in the form of pollution. Define MCP =marginal private cost, MCS = marginal social cost, D = market demand, P =price, and Q = quantity.410(a)(b)(c)(d)100PMC,MLDIf the market is competitive, what is the equilibrium price and quantity?Is this equilibrium outcome socially optimal?In terms of the areas denoted by A, B, and C, what is the deadweightloss to society if the market is competitive?What can the government do to achieve the socially optimal level ofpollution?

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Answered: The figure below shows the market for a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consumers A, B, C, and D respectively have a willingness to pay of $130, $100, $80, and $50 for one widget. Firms W, X, Y, and Z each have capacity to produce one widget at respective costs of $10, $60, $90, and $110. If these are the only consumers and firms in this market, and there are no third party costs or benefits from widgets, what is the socially efficient quantity of widgets? 4 There is insufficient info to answer question 3 2
This is an end-of-chapter problem that I'm struggling with! thanks!
PRICE OF GOOD X P3 P₂ P₁ 0 Q₁ Q₂ Q3 2 Marginal Social Cost Marginal Private Cost Marginal Social Benefit QUANTITY OF GOOD X To correct for the negative externality shown in the graph above, the government should: provide a subsidy in the amount of P3-P2 to firms that are producing Good "X" provide a subsidy in the amount of P4-P2 to firms that are producing Good "X" implement a tax in the amount of P4-P2 to firms that are producing Good "X" implement a tax in the amount of P3-P2 to firms that are producing Good "X" do nothing as this market is already operating at the socially efficient level of output
According to marginal analysis, in a market that experiences a positive externality, the market (private) players would ________________________ to the socially optimal output level. A. over-produce an output level relative B. under-produce an output level relative C. exactly produce an output level equal
Externalities: Suppose the daily inverse demand curve for gasoline in Portland is given by P = $100 – Q, the MC = 1.5Q, and the EMC = 1.5Q. Q is measured in thousands of gallons of gasoline per day. a. Graph the demand, marginal cost, and external marginal cost functions. b. How many gallons will be consumed per day if gasoline consumers do not consider the EMC of gasoline? c. How many gallons of gasoline will be consumed per day if gasoline consumers consider the EMC.
P = 16-.25Q MC = 2 + .25Q Production creates an external benefit equal to $2 per unit. What is the socially optimal level of output? 10 24 28 32
Figure 10 represents a market for good A. Assume that for good A, Private Value = Social Value and the Supply Curve and the Social Cost curves are parallel. Based on Figure 10, we know that this market exhibits ["negative", "positive"] externality. The quantity produced/sold in this market is ["2,000 units", "3,000 units", "4,000 units", "5,000 units"] .The socially optimal quantity is ["0 units", "2,000 units", "3,000 units", "4,000 units", "5,000 units"] .The policy which would internalize the externality and lead to an efficient outcome is ["a tax of $0 per unit", "a tax of $1 per unit", "a tax of $2 per unit", "a subsidy of $1 per unit"].
using an appropriate graph, show the effects of externalities on the private and social optimum prices and quantities. discuss briefly how could social optimum levels be achieved
Question 16 Suppose that flu shots create a positive externality equal to $12 per shot. What is the relationship between the private equilibrium quantity and the socially optimal quantity of flu shots produced? Group of answer choices They are equal. The private equilibrium quantity is greater than the socially optimal quantity. The private equilibrium quantity is less than the socially optimal quantity. There is not enough information to answer the question.
Supply curves for the production of oil in Sanaton are shown in the diagram below. Supply based on both private and private+social costs is shown. Answer the following questions based on the diagram. Supply (Private + Social) Supply (Private) VE (16000 $70 (22000,$59) Demand Price Quantity What is the equilibrium quantity when negative externalities of producing oil are not taken into account? What is the equilibrium price when negative externalities are not taken into account?
Suppose golden retrievers create positive externalities because they are cute and people like seeing them at the park. Which of the following is true? A) The social supply curve is to the left of the private supply curve. B) The social supply curve is to the right of the private supply curve. C) The social demand curve is to the left of the private demand curve. D) The social demand curve is to the right of the private demand curve.
The graph below depicts a market with a positive externality. Market Price P₁ Q₁ Q₂ O Q2 O Q1 OP1 OP2 Quantity D₁ S D₂ Which label shows the quantity that reflects both the external and private benefits of consumption (social demand)?

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