Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Chapter 8, Problem 25RQ
Why does exit occur?
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Just Part D please, this is for environmental economics
3. Consider a single firm that manufactures chemicals and generates pollution through its emissions E.
Researchers have estimated the MDF and MAC curves for the emissions to be the following:
MDF = 4E and MAC = 125 – E
Policymakers have decided to implement an emissions tax to control pollution. They are aware that a
constant per-unit tax of $100 is an efficient policy. Yet they are also aware that this policy is not politically
feasible because of the large tax burden it places on the firm. As a result, policymakers propose a two-
part tax:
a per unit tax of $75 for the first 15 units of emissions
an increase in the per unit tax to $100 for all further units of emissions
With an emissions tax, what is the general condition that determines how much pollution the regulated
party will emit?
What is the efficient level of emissions given the above MDF and MAC curves?
What are the firm's total tax payments under the constant $100 per-unit tax?
What is the firm's total cost of compliance…
2. Answer the following questions as they relate to a fishery:
Why is the maximum sustainable yield not necessarily the optimal sustainable yield? Does the same
intuition apply to Nathaniel's decision of when to cut his trees?
What condition will hold at the equilibrium level of fishing in an open-access fishery? Use a graph to
explain your answer, and show the level of fishing effort.
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Chapter 8 Solutions
Principles of Economics 2e
Ch. 8 - Firms ill a perfectly competitive market are said...Ch. 8 - Would independent trucking fit the characteristics...Ch. 8 - Look at Table 8.13. What would happen to the films...Ch. 8 - Suppose that the market price increases to 6, as...Ch. 8 - Explain in words why a profit-maximizing film will...Ch. 8 - A firms marginal cost curve above the average...Ch. 8 - If new technology in a perfectly competitive...Ch. 8 - A market in perfect competition is in long-run...Ch. 8 - Productive efficiency and allocative efficiency...Ch. 8 - Explain how the profit-maximizing rule of setting...
Ch. 8 - A single firm in a perfectly competitive market is...Ch. 8 - What are the four basic assumptions of perfect...Ch. 8 - What is a price taker firm?Ch. 8 - How does a perfectly competitive firm decide what...Ch. 8 - What prevents a perfectly competitive firm from...Ch. 8 - How does a perfectly competitive film calculate...Ch. 8 - Briefly explain the reason for the shape of a...Ch. 8 - What two rules does a perfectly competitive firm...Ch. 8 - How does the average cost curve help to show...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Should a firm shut down immediately if it is...Ch. 8 - How does the average variable cost curve help a...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Why does entry occur?Ch. 8 - Why does exit occur?Ch. 8 - Do entry and exit occur in the short run, the long...Ch. 8 - What price will a perfectly competitive firm end...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Finding a life partner is a complicated process...Ch. 8 - Can you name five examples of perfectly...Ch. 8 - Your company operates in a perfectly competitive...Ch. 8 - Since a perfectly competitive firm can sell as...Ch. 8 - Many films in the United States file for...Ch. 8 - Why will profits for films in a perfectly...Ch. 8 - Why will losses for firms in a perfectly...Ch. 8 - Assuming that the market for cigarettes is in...Ch. 8 - In the argument for why perfect competition is...Ch. 8 - The AAA Aquarium Co. sells aquariums for 20 each....Ch. 8 - Perfectly competitive firm Doggies Paradise Inc....Ch. 8 - A computer company produces affordable,...
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