The solar roof panel industry has really taken off in recent years. Homeowners typically will make the decision whether to purchase solar panels for their roofs based on the price of the solar panel and the perceived private benefit, which includes lower energy costs of powering their homes. In addition to the private benefits of solar roof panels, there are also large societal benefits in the form of reduced dependence on fossil fuels (coal, oil, etc.), which create more pollution than solar energy sources. Unfortunately, homeowners don't consider these societal benefits when deciding whether or not to purchase solar roof panels. 1. Assuming perfect competition, use the space below to graph the market for solar roof panels. The graph does not need to include specific numbers or values but should include: a) Clearly-labeled x- and y-axis b) A clearly-labeled supply curve c) A clearly-labeled private marginal benefit (or demand) curve d) A clearly-labeled social marginal benefit curve e) The market equilibrium price and quantity 2. Draw and label the socially optimal quantity of solar roof panels on your graph. 3. Does the market produce an over-consumption or under-consumption of solar roof panels? Why?

The solar roof panel industry has really taken off in recent years. Homeowners typically will make the decision whether to purchase solar panels for their roofs based on the price of the solar panel and the perceived private benefit, which includes lower energy costs of powering their homes. In addition to the private benefits of solar roof panels, there are also large societal benefits in the form of reduced dependence on fossil fuels (coal, oil, etc.), which create more pollution than solar energy sources. Unfortunately, homeowners don't consider these societal benefits when deciding whether or not to purchase solar roof panels. 1. Assuming perfect competition, use the space below to graph the market for solar roof panels. The graph does not need to include specific numbers or values but should include: a) Clearly-labeled x- and y-axis b) A clearly-labeled supply curve c) A clearly-labeled private marginal benefit (or demand) curve d) A clearly-labeled social marginal benefit curve e) The market equilibrium price and quantity 2. Draw and label the socially optimal quantity of solar roof panels on your graph. 3. Does the market produce an over-consumption or under-consumption of solar roof panels? 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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