BN12.2 (b) (c)Case:The market for dry cleaning is reflected by the demand and supply curves (Q is inthousands):Pa = 5-QPs= 2 + 2QProducing dry cleaning creates ground water pollution with a constant marginalexternal cost of 1.2.Question:(b) Calculate the unregulated price and quantity of dry cleaning?(c) Calculate the efficient price and quantity from a societal perspective?

Externalities are side effects of economic activities that are faced by third parties. These effects…

Answered: The market for dry cleaning is…

The market for dry cleaning is reflected by the demand and supply curves (Q is in thousands): Pa = 5-Q Ps= 2 + 2Q Producing dry cleaning creates ground water pollution with a constant marginal

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Discuss the issues faced when demand for rail and ocean transport does not meet the supply of…

A: The objective of this question is to understand the problems that arise when the demand for rail and…

Q: The highest price customers are willing to pay is called the price. (Enter only one word per blank.)

A: In economics, the maximum price is a key idea that establishes the upper limit of what buyers in a…

Q: A steel producing firm has a demand function given as P = 30-Q. the cost function facing the firm is…

A: Equilibrium in a competitive market is determined at the output level where the marginal revenue is…

Q: Quantity Price (gallons) Total Revenue (profits) $120 $0 10 $110 1,100 20 $100 2,000 30 $90 2,700 40…

Q: Consider a competitive market for some commodity x in which some firms are polluters. Firm A: C(xA…

A: Economic activity has the potential to harm the environment. No matter how wealthy or poor, market-…

Q: se economic reasoning as to why the market would fail to yield the efficient outcome of price…

A: The price gouging occurs when the firm tends to change the higher price or such price is not fair…

Q: The cost (supply) of each "unit" of NPR (National Public Radio) is P=9, Derek's valuation for each…

A: MC of NPR = 9 Derek's Valuation : Pd = 20 - 2Qd Qd = ( 20 - Pd)/2 Kim's Valuation : Pk = 10 - Qk…

Q: D2 (A) (B) S, P S2 P (C) (D) Which of the diagrams illustrates the effect of a governmental subsidy…

A: The answer is C only

Q: Supply curves for the production of oil in Sanaton are shown in the diagram below. Supply based on…

A: Externalities are the economic an activities which have the spillover effects on societies'…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=3P and Market Demand…

A: Answer in Step 2

Q: Calculate the efficiency loss in an unregulated market with marginal benefits 90 – 0.25q, marginal…

A: Unregulated market equilibrium: Obtained at the quantity where demand = supply or where Marginal…

Q: Consider a river found in the city of Pittsburgh, and then answer the questions that follow. The…

A: Total profit table:To get the total profit, add the profits of the ketchup factory and the boat…

Q: A firm that electroplates inexpensive jewelry produces toxic waste, some of which ends up in a…

A: Deadweight loss arises when there is inefficient allocation of the resources of the economy.

Q: What Factors Influence Perfect Competition for Environmental Economic Market Structures.

A: Perfect competition describes a market structure where a Large number of buyers and sellers and…

Q: Complete the following table by computing the total profit (the research facility's economic profit…

A: Environmental economics focuses on how environmental policies affect the economy. The right to own…

Q: Match the nonprice determinants of supply and demand. (Click the appropriate box) Determinant…

A: The notions of demand and supply forms the basic building block of microeconomics. Effective demand…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=5P and Market Demand…

A: Supply function Q=5P P = Q/5 MPC = Q/5 , where MPC = Marginal private costs Market Demand is given…

Q: Explain the reason on how and why the beneficial fungi and microbes help farmers increase their…

A: Microbes in the soil (bacteria and fungus) are critical for digesting organic materials and…

Q: If a price through price regulation is set under the equilibrium price in a market, which of the…

A: At the point when the price is set underneath the balance cost in a market, there will be…

Q: Prove the following claim: when the firm has constant marginal cost, the optimal two-part tariff is…

A: Two-part tariffs are pricing schemes that include a fixed fee for any amount of good consumed,…

Q: The demand curve in the market of grapefruit is Qd = 120 - 2Pd and the marginal cost of production…

A: The individual's ability to buy a product in the market is described as the demand. The consumer has…

Q: An agribusiness firm is a monopoly in the market of a herbicide. The marginal cost is equal to 20…

A: The price function is given as follows: The total revenue can be represents as follows:…

Q: The figure to the right shows the market for one-bedroom apartments in Calgary. If this market is…

A: The objective of the question is to understand the impact of rent control on the market for…

Q: Deadweight loss mealures the loss in society's welfare that occurs because a monopolist does not…

A: The objective of the question is to understand whether deadweight loss is a measure of the loss in…

Q: e. Determine the deadweight loss to society (if any) when the regulated price is $10 per unit.

A: Deadweight loss is loss of total surplus due to inefficient production.It is area that could have…

Q: The cost of hiring a secuirty guard to patrol the neighborhood of a community is 300 per week…

A: Marginal benefit is the extra gain earned by the consumer when they purchase a good or product. The…

Q: Suppose the demand for standard sized bottled water in the US is Qd=120-30.5P where Qd is monthly…

A: (Note: Since the question has multiple parts, only first three have been solved. Please resubmit the…

Q: Assume the demand and supply equations for sweatshirts is given by: P = 30 0.2Qd P = 2 + 1.2Qs The…

A: The demand curve represents the quantity demanded by consumers at different price levels.The supply…

Q: From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why not?…

A: 1) From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why…

Q: A large share of the world supply of cocoa beans comes from Ghana and Ivory Coast. Suppose that the…

A: The delicious heart of chocolate, cocoa, comes mainly from West Africa. With Ghana and Ivory Coast…

Q: As abatement efforts increase (pollution is reduced., the marginal benefits from abatement and the…

A: The acts and steps done to lessen or control a particular environmental concern, such as pollution…

Q: A chemical company can produce Q units of a chemical H, with marginal costs of MC = 9 + Q, and can…

A: Marginal Cost (MC):Definition: Marginal Cost represents the additional cost incurred by producing…

Q: According to the above table, at a price of $1 per unit, which of the following would exist? A) a…

A: Given,Price per Constant-Quality UnitQuantity Demanded of Constant-Quality Units per yearQuantity…

Q: Price $400 $320 $120 300 350 Marginal Social Cost Supply = MPC Demand = MB -MEC = $120 Thousands of…

A: Externalities are still important in modern economics because they highlight the unexpected…

Q: 8. a) Suppose a firm A produces a product q, but also pollution x that affects a second firm B. Firm…

A: Cost function of firm A CA(q,x) = q2 + (x - 4)2 PA = 12 Cost function of firm B CB(r,x) = r2 + xr…

Q: A steel producing firm has a demand fianction given as P = 30 - Q. the cost function facing the firm…

A: In the production process, the conditions and fluctuations that happen between demand and also the…

Q: Assume the demand and supply equations for a white mushroom truffle (per ounce) is given by: P =…

A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve.The…

Q: Suppose you are one of the 4 farmers in the game. Your optimal choice is to own (choose on) farmers…

A: The optimal decision is one that leads to known or expected results, at least as good as all other…

Question

100%

BN12.2 (b) (c)
Case:
The market for dry cleaning is reflected by the demand and supply curves (Q is in
thousands):
Pa = 5-Q
Ps= 2 + 2Q
Producing dry cleaning creates ground water pollution with a constant marginal
external cost of 1.2.
Question:
(b) Calculate the unregulated price and quantity of dry cleaning?
(c) Calculate the efficient price and quantity from a societal perspective?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define externalities

VIEW

Step 2: Calculate Equilibrium price and quantity

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Social cost associated with a community owned resource can be internalized if a) the state imposes a tax on the user of the resource b) people are considerate of others account for the social cost in their consumption of the resource c) the community owned resources is converted to a privately-owned resource d) all of the above
Jonathan, Scott and Mitchell share a garage. All enjoy having the garage cleaned, regardless of who pays for cleaning. The graph below represents Jonathan, Scott and Mitchell’s individual demand for garage cleaning. The marginal cost of cleaning $3 per hour. The Lindahl prices for Jonathan, Scott and Mitchell are, respectively, $68/17, $17/17, and $4/85 per hour. $34/17, $17/17, and $0 per hour. None of these. $30/17, $15/17, $6/17 per hour. $0, $0, and $0 per hour.
Finding an Efficient Solution, Supply: P = 10.0 + 0.1Q; Demand: P = 50.0 − 0.125Q. Let Marginal External Cost (MEC) = 0.05Q. Solve for Q and P
3) A chemical company can produce Q units of a chemical H, with marginal costs of MC = 9 + Q. and can distribute the chemical at marketing marginal costs of MC = 1. The demand for His given by P = 30-1.5Q. If an external market exists where H can be bought or sold without marketing expenses for $13, how much H should the firm produce? 00 units 4 units 05 units 07 units 10 units
Consider the following table, describing each person's willingness to pay for different levels (units) mosquito control. Mosquito control is a public good for this society. Demand for Mosquito Control Person A Level WTP($) Person B Person C WTP($) WTP($) 10 25 16 15 20 20 14 12 30 15 12 8. 40 10 10 6. 50 5 8 3 The marginal cost of producing one unit of mosquito control is $35 and constant. Assuming there is no Free-Rider issue, the private level of mosquito control supplied would be units. The optimal level of mosquito control however, would be units.
Environmentalists in Tennessee brought suit against the Champion Paper Company of North Carolina for polluting the Pigeon River, which flows from North Carolina into eastern Tennessee. Tennessee claimed that the coffee-colored water smelled bad and would not support fishing or swimming. Environmentalists requested that the river be restored to its pristine state, or the water quality it had before the coming of industry. The Environmental Protection Agency (EPA) heard the suit and applied an efficiency standard. In other words, the EPA set limits on how much pollution the paper company could release (though this number was not zero). Adjust the following graph to indicate the negative externality. PRICE (Dollars per sheet) 2 1 10 9 Supply Demand 8 0 0 1 2 Demand 7 9 10 5 3 4 QUANTITY (Sheets of paper) Supply When the EPA imposes standards on the paper company, the quantity of paper produced will company will . The new equilibrium price is $ , and the price of paper from this per sheet…
Given the inelastic demand for water, how might this impact the profits of the companies that produce water?
Consider a river found in the city of Philadelphia, and then answer the questions that follow. The city has a resort whose visitors use the river for recreation. The city also has a tannery that dumps industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the tannery's waste decreases the resort's economic profit. Suppose that the tannery could use a different production method that involves recycling water. This would reduce the pollution in the river to levels safe for recreation, and the resort would no longer be affected. If the tannery uses the recycling method, then the tannery's economic profit is $1,500 per week, and the resort's economic profit is $1,800 per week. If the tannery does not use the recycling method, then the tannery's economic profit is $2,000 per week, and the resort's economic profit is $1,000 per week. These figures are summarized in the following table. Complete the following table by computing…
the answers shown for the part c are incorrect
When equilibrium output in a competitive market is at the socially efficient level: a) only market values are incorporated into marginal benefits to consumers and marginal costs of production. b) net social value is as large as possible. c) the marginal benefit to consumers may exceed or be less than the marginal cost of production. d) total willingness to pay is as large as possible.
Imagine a firm with a marginal abatement cost (MAC) function equal to: MAC = 25 - 5E. The government introduces a cap-and-trade policy and grandfathers the firm 2 permits initially. Assuming the market price of permits is $5, the firm will spend a total of $___ in order to buy permits.
An externality is a private cost or benefit that results from the production or consumption of a good or service that is external to a market. refers to production or consumption that occurs outdoors. enhances market efficiency. is a benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service.