Two firms are ordered by the Government to reduce their pollution levels. Firm A’s marginal costs associated with pollution reduction are MC = 20 + 4Q. Firm B’s marginal costs associated with pollution reduction are MC = 10 + 8Q. The marginal benefit of pollution reduction is MB = 400 – 4Q. What is the socially optimal level of each firm’s pollution reduction?
Q: The following table shows the current level of toxic waste dumped by two firms and the marginal cost…
A: Pollution is often considered a negative externality because the harmful effects of pollutants, such…
Q: The following table shows the total costs for each of four firms (A,B,C, and D) to eliminate units…
A: These firm will be comparing the cost of eliminating the pollution and tax penalty which is paid to…
Q: What is the average profit per boat when there are 10 boats in the fishery? Suppose there are no…
A: The total revenue is referring to the total income received in return for economic actions. The…
Q: why do externalities make market outcomes inefficient?
A: A third party, who is not directly related with the exchange or production of goods and services…
Q: The town has a campground whose visitors use the lake for recreation. The town also has a research…
A: The property rights refer to the rights to use or obtain the benefits from a good or a service. The…
Q: Imagine the government of California has proposed a new tax on vehicles based on the amount of…
A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…
Q: Firms A and B each produce 80 units of pollution. The federal government wants to reduce pollution…
A: The marginal cost in economics is the change in total cost that occurs when the amount produced…
Q: The following table shows the marginal costs for each of four firms (A, B, C, and D) to eliminate…
A: If the government charged a fee of $84 per unit of pollution, firm will eliminate the pollution…
Q: Firm A currently dumps 223 tons of chemicals into the local river. Firm B currently dumps 192 tons…
A: Pollution permits are legal rights given to emit a certain level of pollution over a given period of…
Q: Firm A currently dumps 161 tons of chemicals into the local river. Firm B currently dumps 127 tons…
A: The marginal cost of emissions is the extra environmental impact incurred as a consequence of…
Q: To produce honey, beekeepers place hives of bees in the fields of farmers. As bees gather nectar,…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Give an example of a positive and negative externality. Explain why market outcomes are inefficient…
A: Externality is an economic term referring to the cost (negative) or benefit (positive) caused by a…
Q: Firms A and B each produce 80 units of pollution. The federal government wants to reduce pollution…
A: Given MCA=50+3QA MCB=20+6QB (MARGINAL BENIFIT) MB=590-3Qtot QA and QB are the quantities of…
Q: Firms A and B each produce 80 units of pollution. The federal government wants to reduce pollution…
A: The social optimum is the allocation made by a good social planner who is solely limited by the…
Q: Firm A currently dumps 247 tons of chemicals into the local river. Firm B currently dumps 246 tons…
A: Pollution is caused mainly by industrial activities while producing goods and participating in the…
Q: You have the following supply and demand curves for an industry: QSX = -100 + 3 * PX…
A: Provided information: It is given in the question that- Equation of the supply curve- QSX = -100 + 3…
Q: Imagine a firm's marginal abatement cost function with existing technologies is: MAC = 12 – E. If…
A: Environmental economics shows the effects of economic activities on the environment. Economic…
Q: Two firms are ordered by the federal government to reduce their pollution levels. Firm A’s marginal…
A: NOTE:We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Suppose that the volume of traffic at which demand intersects private trip cost is 1000 cars and the…
A: Externalities are still fundamental to contemporary economics due to the fact that they reiterate…
Q: The primary source of air pollution in the small town of Smokey, Nevada is a nearby steel mill. The…
A: An externality refers to a link among individuals that lie outside the price system of the economy.…
Q: Firms A and B each produce 80 units of pollution. The federal government wants to reduce pollution…
A: Firm A produce 80 units of pollution Firm b produces 80 units of pollution. MCA=50+3QA MCB=20+6QB…
Q: The figure below shows the marginal benefit (demand) of polluting for two firms: Alpha and Beta.…
A: Marginal benefit: The maximum amount a consumer is prepared to spend for an extra unit of goods is…
Q: Problem 5 refers to the following setup: The demand curve in a market is Q = 6-P. Firm A and B are…
A: The demand curve within the market is given as A and B are the only sellers in the market. The…
Q: Firm A currently dumps 243 tons of chemicals into the local river. Firm B currently dumps 126 tons…
A: Pollution permits refer to the rights that are legally given to polluting to a certain amount.…
Q: The town has a kayak rental and visitors use the lake for recreation. The town also has a chemical…
A: The economic effects of environmental policies are the focus of environmental economics. When we…
Q: There are 2 firms: Firm X and Firm Y. Firm X has the following cost to pollution reduction: MCx = 10…
A: Marginal Cost of pollution reduction for Firm X : MCx = 10 + 2Qx Total Cost of pollution reduction…
Q: Firms A and B each produce 80 units of pollution. The federal government wants to reduce pollution…
A: The Social optimum level of both the firms requires MB=MCA= MCB. It also requires estimating QA in…
Q: Firms A and B each produce 80 units of pollution. The federal government wants to reduce pollution…
A: given question- production of A and B = 80 units MCA = 50 + 3QA MCB = 20 + 6QB MB = 590 – 3Qtot…
Q: A developing country implements pollution laws for the first time. Initially, there are some…
A: Through implementing a pollution law by the government, they want to improve environmental…
Q: Suppose the external marginal cost of producing steel is MCExternal = 3Q and the internal marginal…
A: Given external marginal cost = 3Q Internal marginal cost = 6Q Inverse demand, P = 100 – Q
Q: Efficiency in the presence of externalities Air horns impose many external costs on society: the…
A: Market equilibrium Market equilibrium is defined as the moment in the market where the quantity…
Q: Complete the following table with the action each firm will take at this permit price, the amount of…
A: In economics, we make the assumption that any transaction involving two people must be true or it…
Two firms are ordered by the Government to reduce their pollution levels. Firm A’s marginal costs associated with pollution reduction are MC = 20 + 4Q. Firm B’s marginal costs associated with pollution reduction are MC = 10 + 8Q. The marginal benefit of pollution reduction is MB = 400 – 4Q. What is the socially optimal level of each firm’s pollution reduction?
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- Problem 5 refers to the following setup: The demand curve in a market is Q = 6-P. Firm A and B are the only sellers, their marginal costs are constant at 2 and 3 respectively, and there is no fixed cost. They produce identical goods. 5. a) What is the socially efficient outcome? (Specify the quantity for each firm.) b) Find the quantity produced by each firm and the price under Cournot competition. c) What is each firm's profit under Cournot competition?Firm A currently dumps 223 tons of chemicals into the local river. Firm B currently dumps 192 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. The government gives each firm 10 pollution permits. The abatement costs of one ton of pollution is $173 for Firm A and $76 for Firm B. What would be the total cost of reducing pollution, if the firms are allowed to trade permits between each other?The town has a kayak rental and visitors use the lake for recreation. The town also has a chemical lab that dumps industrial waste into the lake. This pollutes the lake and makes it a less desirable vacation destination. That is, the chemical lab's waste decreases the kayak rental's economic profit. Suppose that the chemical lab could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the kayak rental would no longer be affected. If the chemical lab uses the recycling method, then the chemical lab's economic profit is $900 per week, and the kayak rental's economic profit is $2,600 per week. If the chemical lab does not use the recycling method, then the chemical lab's economic profit is $1,600 per week, and the kayak rental's economic profit is $1,500 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the chemical lab's…
- The primary source of air pollution in the small town of Smokey, Nevada is a nearby steel mill. The local environmental agency has decided that the mill needs to reduce its emissions because the town's population is located directly downwind from it. Currently the agency is considering three different approaches to reducing pollution from the mill: a technology standard, an emission standard and an emission tax. Why might the owner of the mill prefer an emission standard to a technology standard that would produce the same level of emissions? a Because with emission standards the polluter is more flexible in selecting the technology that will minimize her abatement cost Ob. Because polluters usually try to stick to their existing technology O C. Because it has been proven to be easier to implement O d. Because polluters, as all producers are suspicious about new technologiesImagine a firm's marginal abatement cost function with existing technologies is: MAC = 12 – E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 6 – 0.5E. The adoption costs for the new technology are $6. If the government raises the tax on emissions from $1 to $4, the benefits of adopting the new technologies increase by $. Select one: a. $7.50. O b. $12. C. $3. O d. $4.5.The figure below shows the marginal benefit (demand) of polluting for two firms: Alpha and Beta. Before the introduction of a pollution tax, pollution is free, that is, MC = $0 per ton of emissions. Marginal Benefit (MB) to Firm Tax = $100 0 MB BETA MBALPHA 25 50 75 100 Emissions (tons) The government decides to impose a tax on pollution of $100 per ton of emissions. That is, the per-unit the tax is the marginal cost of polluting. Which of the follow are true? (Select all that are true.) a. As a result of the tax, the total emissions will decrease by 50 units b. The tax was intended to decrease production by 50 units for each firm. c. As a result of the tax, both firms will decrease emissions by the same amount d. After the tax is imposed, Firm Beta will emit 50 tons more pollution than Firm Alpha e. Before the tax is imposed, Firm Beta emitted more pollution than Firm Alpha f. As a result of the tax, total emissions from the two firms will be cut in half g. The amount of tax collected…
- Complete the following Exercises. Use complete sentences. Consider two firms who each release 10 units of pollution initially, for a total of 20 units. Their supply curves for abatement are given below. These supply curves measure the marginal cost of abatement, or the cost of cleaning up each unit of pollution. For example, it costs firm 1 $40 to clean up (or abate) the 1st unit, $80 to clean up the 2nd unit, and so forth. Supply of Abatement UnitFirm 1Firm 2 1$ 40$ 36 2$80$56 3$120$76 4$160$96 5$200$116 6$240$136 7$280$156 8$320$176 9$360$196 10$400 $216 A.) Assume that the damages from the pollution are an external cost from the standpoint of the two firms. How many units will each abate? Why?Why are their marginal costs of abatement (supply curves) rising as they eliminate more pollution (i.e., as they get closer to zero units of pollution)? Now assume the Environmental Protection Agency has determined that the desired…You have the following supply and demand curves for an industry: QSX = -100 + 3 * PX for PX >= $40 QDX = 300 – 2 * PX However, this industry causes pollution damage to third parties. Each quantity produced creates pollution that causes equal damage, such that the marginal external cost is a constant $20 per unit (MEC= $20). a) Calculate the price quantity combinations for both the perfectly competitive and the efficient solution. Graphically show both solutions as well. Make sure you label all curves and axes. b) What efficient tax would move the competitive market to the efficient solution?Suppose a municipality votes to reduce the combined pollution introduced by three local companies. Presently, each firm cre the area, for a total of 12 pollution units. The government can reduce total pollution in the area to 6 units by choosing between the following two methods: Methods to Reduce Pollution 1. The government imposes pollution standards using regulation. 2. The government issues tradable pollution permits. The costs faced by each firm are different, so it is more difficult for some firms to reduce pollution than others. The following table shows the cost faced by each firm to eliminate each unit of pollution. Assume that the cost of eliminating all 4 units of pollution (that is, reducing pollution to zero) is prohibitively expensive for all three firms. Firm Firm A Firm B Firm C First Unit of Pollution (Dollars) 55 650 90 Method 1: Regulation Cost of Eliminating the... Second Unit of Pollution (Dollars) 70 800 125 Third Unit of Pollution (Dollars) 110 1,500 180 Next,…
- The following table shows the total costs for each of four firms (A,B,C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $40, and for Firm A to eliminate two units it would cost a total of $105. If the government charged a tax of $74 per unit of pollution, how many units of pollution would the firms eliminate altogether? Number of units Firm A Firm B Firm C Firm D eliminated One unit 40 45 50 48 Two units 105 100 80 108 Three units 180 172 165 178 Four units 285 244 250 285 O 16 O 11 O 14 0 9 O 5Kk.37.Two identical firms save money from polluting. A firm’s marginal savings from emitting an amount e are given by 10 − 2e. The two firms differ in their impact on ambient pollution concentrations. Two units of emissions from firm 1 result in one unit of ambient pollution, while one unit of emissions from firm 2 results in one unit of ambient pollution. a) Initially the policy-maker decides to institute a standard cap and trade program instead of regulating ambient pollution. If each firm is initially given three emission permits, how many permits will each firm end up with and what will be the price? b) The policy-maker realizes the differences between the firms and de- cides to institute ambient pollution permit trading. What are the transfer coefficients for each of the firms? If instead each firm is given two ambient pollution permits and trading takes place, how much will each firm end up emitting, and what will be the price?
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)