Suppose a producer faces the following private marginal costs and can sell their good for $100...
Suppose a producer faces the following private marginal costs and can sell their good for $100 each.
Quantity 1 2 3 4 5 6
Private MC 20 40 60 80 100 120
If each unit creates $40 of negative externalities, the efficient level of production is ______ while in actuality the producer will make ______.
2 units; 3 units
3 units; 2 units
5 units; 3 units
3 units; 5 units
Homework Answers
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Suppose a producer faces the following private marginal costs
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using this information. The marginal private benefits for a good is represented by MPB = 80...
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57. The following figure shows the market supply and demand of a good whose production entails...
57. The following figure shows the market supply and demand of a good whose production entails a $2 negative externality per unit. Refer to the figure above. A total of ________ units of this good will be traded in this market, at the price of ________. a. 20; $2 b. 60; $8 c. 40; $4 d. 80; $6 58. The following figure shows the market supply and demand of a good whose production entails a $2 negative externality per unit....
PART TWO. Answer the following problems in the space provided. Please show your work in an...
PART TWO. Answer the following problems in the space provided. Please show your work in an organized way with clearly labeled graphs should if you choose to use any. Total 80 Points. 5. Suppose that the market for a certain good has a demand of P 80 -Q. The aggregate private marginal cost for the firms that produce the good faces is MC = 3Q + 20. However, production of the good also creates pollution with a marginal external cost...
1. Individual A and B have the following marginal benefits for private good X: MBA =...
1. Individual A and B have the following marginal benefits for private good X: MBA = 10 - XA MBg = 10 - XB While the cost of producing each unit is 2 dollarsyi.e., MC = 2). You are asked to: a. On a graph, find the market demand function for private good X (hint: make sure to label the angles, elbows, and corners as needed). b. Find the market equilibrium. e. Find consumer A quantity demanded, and consumer B...
In a market, demand is given by P = 100 − Q and the (private) marginal...
In a market, demand is given by P = 100 − Q and the (private) marginal cost of production for the aggregation of all firms (the industry supply curve) is given by MC = Q. Pollution by the industry creates external damages given by the (constant) marginal external cost curve MEC = 30. (a) Calculate the output and price of if the industry operates under competitive conditions without regulation. (b) Calculate the socially efficient price and output of the industry...
Suppose the government is producing a public good. If the marginal benefit of the last unit...
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We are considering a market with marginal cost of P=100+2Q and a demand of P=500-2Q. Use...
We are considering a market with marginal cost of P=100+2Q and a demand of P=500-2Q. Use that information to answer the following questions. a. Find the market equilibrium (price and quantity in the market). b. Find producer and consumer surplus. c. Now imagine production of this good created a negative externality of 1$ per unit of output. Find the socially optimal outcome (price and quantity) taking this externality into account. d. Find consumer and producer surplus at the socially efficient...
Concept: Consumer and Producer Surplus Suppose a local cable company provides cable service to a rural...
Concept: Consumer and Producer Surplus Suppose a local cable company provides cable service to a rural community. The figure to the right illustrates the cable company's marginal cost of providing cable service along with the community's demand for cable TV. MC C ︵ 120- Assume the local cable company is a monopoly When the company maximizes profits, consumer surplus equals $ 200.0 (enter a numeric response using a real number rounded to one decimal place), and producer surplus equals $600...
Marginal Sociauantity Marginal Marginal Private benefit Cost (dollars (number of Social per course) 100 80 60 40 20 Benefit 60 80 100 120 140 students) 4,500 4,000 3,500 3,000 2,500 20 40 60 80 100 The table above gives the marginal social cost (which equals the price), marginal private benefnt, and marginal social benefit of students attending Diablo Valley College (DVC) in Concord, California The socially efficient number of students attending DVC is Marginal Private benefit Marginal SociaQuantity Marginal Cost...
PART TWO. Answer the following problems in the space provided. Please show your work in an organized way with clearly labeled graphs should if you choose to use any. Total 80 Points. 5. Suppose that the market for a certain good has a demand of P 80 -Q. The aggregate private marginal cost for the firms that produce the good faces is MC = 3Q + 20. However, production of the good also creates pollution with a marginal external cost...
1. Individual A and B have the following marginal benefits for private good X: MBA = 10 - XA MBg = 10 - XB While the cost of producing each unit is 2 dollarsyi.e., MC = 2). You are asked to: a. On a graph, find the market demand function for private good X (hint: make sure to label the angles, elbows, and corners as needed). b. Find the market equilibrium. e. Find consumer A quantity demanded, and consumer B...
Concept: Consumer and Producer Surplus Suppose a local cable company provides cable service to a rural community. The figure to the right illustrates the cable company's marginal cost of providing cable service along with the community's demand for cable TV. MC C ︵ 120- Assume the local cable company is a monopoly When the company maximizes profits, consumer surplus equals $ 200.0 (enter a numeric response using a real number rounded to one decimal place), and producer surplus equals $600...
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