The graph illustrates the market for tomatoes. Suppose that tomato growers use a chemical to control insects and waste flows into the town's river. The marginal social cost of producing tomatoes is double the marginal private cost. Compare the outcomes when the town owns the river and when the tomato grower owns the river. 150- 125- Price (dollars per tonne) 100- Suppose the town owns the river. Draw a point to show marginal social cost if production is 400 tonnes of tomatoes a month. Label it 1. 75- Draw the MSC curve and label it. Draw a point to show the quantity of tomatoes produced and the marginal social cost at this point. Label it 2. S 50- Draw a point to show the marginal private cost of producing this quantity. Label it 3. D 25- When the town owns the river and charges the tomato grower for use of the river, the tomato grower produces pays the town $a tonne. >>> Answer to 2 decimal places. tonnes of tomatoes a month and 0+ 50 100 150 200 250 300 350 400 450 500 Quantity (tonnes per month) When the tomato grower owns the river and rents it to the town, the tomato grower produces tonnes of tomatoes a month. >>> Draw only the objects specified in the question. The amount that the town is willing to pay to use the river is $ tomatoes. per tonne of >>> Answer to 2 decimal places. Q
The graph illustrates the market for tomatoes. Suppose that tomato growers use a chemical to control insects and waste flows into the town's river. The marginal social cost of producing tomatoes is double the marginal private cost. Compare the outcomes when the town owns the river and when the tomato grower owns the river. 150- 125- Price (dollars per tonne) 100- Suppose the town owns the river. Draw a point to show marginal social cost if production is 400 tonnes of tomatoes a month. Label it 1. 75- Draw the MSC curve and label it. Draw a point to show the quantity of tomatoes produced and the marginal social cost at this point. Label it 2. S 50- Draw a point to show the marginal private cost of producing this quantity. Label it 3. D 25- When the town owns the river and charges the tomato grower for use of the river, the tomato grower produces pays the town $a tonne. >>> Answer to 2 decimal places. tonnes of tomatoes a month and 0+ 50 100 150 200 250 300 350 400 450 500 Quantity (tonnes per month) When the tomato grower owns the river and rents it to the town, the tomato grower produces tonnes of tomatoes a month. >>> Draw only the objects specified in the question. The amount that the town is willing to pay to use the river is $ tomatoes. per tonne of >>> Answer to 2 decimal places. Q
Chapter1: Making Economics Decisions
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Problem 1QTC
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