Question

Light​ Bulbs: Shining a Light on Bulb Recycling

​We've received several questions about recycling light​ bulbs, ranging from regular incandescents to compact fluorescents​ (CFLs). Home Depot Canada is aiming to recycle 1.5 million bulbs by 2011. Lasting six to 10 times longer than the average incandescent bulb and using up to 75 per cent less​ electricity, CFLs save on power consumption and cut your electricity bill.

 The graph shows the market for CFLs.

Suppose the government decides to subsidize CFLs.

Draw the S​ = MSC​ - subsidy curve that results in the efficient quantity of lightbulbs. Label it.

Draw a point to show the efficient quantity and the marginal private benefit at this quantity.

  Price and cost (dollars per bulb) 5.00 S = MC 4.00- 3,00 2.00- MSB 0.0011 DMBT 9 10 À 5 6 8 Quantity (millions of bulbs per y

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Answer #1

S = MSc. subsi as X Efficient quantity O.S MSB KD-MB with subsidy , culre swifts curs where minion and sight word. Mo = MSC.

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