The robot factory is situated next to a dormitory for nurses who work night shifts. The production process is rather noisy, and the nurses often complain that their sleep is disturbed. The following graph depicts the marginalprivate cost (MPĆ) and marginal social cost (MSC) of the robot factory production.Ss00Marginalsocial cotS800S700Marginalprivate costS500S400PriceS00Sa00Sa00O 10.000 20000 s0.000 .0o s0.000 0.000 P0.000 0.000 so.000 s00.000a anity of robots per monthYou will not be given credit unless you provide a detailed explanation for the following questions!a)Are there externalities in this market? How can you tell?b)Suppose that the factory does not take into account the costs imposed on nurses. At which point the factory maximizes its profits? Explain why.c)Now suppose that a single firm owned BOTH the robot factory and the dormitory. At which point the factory maximizes its profits? Explain why.d)At which point the number of robots produced is Pareto efficient? Explain.

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The robot factory is situated next to a dormitory for nurses who work night shifts. The production process is rather noisy, and the nurses often complain that their sleep is disturbed. The following graph depicts the marginal private cost (MP9 and marginal social cost (MSC) of the robot factory production. ecial cn Marginal privte co • 0 m.0oe c0 se.0 0 e ce 0 .c0 Gotyofbe ermo You will not be given credit unless you provide a detailed explanation for the following questions! a) Are there externalities in this market? How can you tell? b) Suppose that the factory does not take into account the costs imposed on nurses. At which point the factory maximizes its profits? Explain why. Now suppose that a single firm owned BOTH the robot factory and the dormitory. At which point the factory maximizes its profits? Explain why.

The robot factory is situated next to a dormitory for nurses who work night shifts. The production process is rather noisy, and the nurses often complain that their sleep is disturbed. The following graph depicts the marginal private cost (MP9 and marginal social cost (MSC) of the robot factory production. ecial cn Marginal privte co • 0 m.0oe c0 se.0 0 e ce 0 .c0 Gotyofbe ermo You will not be given credit unless you provide a detailed explanation for the following questions! a) Are there externalities in this market? How can you tell? b) Suppose that the factory does not take into account the costs imposed on nurses. At which point the factory maximizes its profits? Explain why. Now suppose that a single firm owned BOTH the robot factory and the dormitory. At which point the factory maximizes its profits? Explain why.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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