ZuoTi.Pro
Question

3. John Gardner is the city official. The city is considering a proposal to award an exclusive contract to Cleanco, a waste collection company. Mr. Gardner has discovered that an economic planner hired a year ago has generated the demand, marginal revenue, total cost and marginal cost functions for the market as given below: P 28-0.0008Q MR 28 -0.0016Q TC = 120,000 + 0.0006ơ MC 0.0012Q, where Q the number of households and P- the price of basic monthly disposal services. Conditions change very slowly in the community so that Mr. Gardner considers the cost and demand functions to be reasonably valid for present conditions. Mr. Gardner knows relatively little economics and has hired you to use the information above to answer the questions listed below 1 of 2 (a) What price and quantity would be expected if the firm is allowed to operate completely unregulated asa (b) Mr. Gardner has asked you to recommend a price and quantity that would be socially efficient. (c) Compare the economic efficiency implications of (a) and (b) above. Your answer need not include monopoly? Recommend a price and quantity to Mr. Gardner, using economic theory to justify your answer. numerical calculations, but should include relevant diagrams to demonstrate deadweight loss.

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

P- 28- 0008e Tc = 120 000 + 0.0006 Q2 @ Fa Ma wonetoly >a 28 0o 28 s..Ha Quaak would be utuh4 be loo。。 Q 10000 and P be う p 28-0.0008乂/0000 So ha phce be 20be 400 0 On 29,一6.00090 P 63 Customa wil en İng mare Consuma Suplu0,28 MC 1o,ooo nanh Ecemem Hus Econo m den uut- be cane 。

0 0
Add a comment
Know the answer?
Add Answer to:
3. John Gardner is the city official. The city is considering a proposal to award an...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question 3 (10 points) Suppose a certain city has a monopol city has a monopoly cable-television...

    Question 3 (10 points) Suppose a certain city has a monopol city has a monopoly cable-television company. This company has total costs TC (Hint: using calculus, this means sing calculus, this means MC = 50 since MC is the derivative of TC with respect to output.) The demand in the community is of the form Qo (alternatively, you can write the demand equation as Q. = 30 - 0.1P). • Graphically depict the demand curve as well as the marginal...

  • 3. Show that MR follows the notion "same intercept, twice the slope" of demand. 4. Is...

    3. Show that MR follows the notion "same intercept, twice the slope" of demand. 4. Is a monopoly the most socially optimal market? How does a monopoly differ from a perfectly competitive market? Explain and show in a graph. What is the difference in welfare? 5. At what point would a monopoly decide to shut down in the short-run? In the long run? 6. A firm facing demand curve p= 24-Q and MC=2Q has a new demand curve of p=36-2Q...

  • Question 4 [22 marks] Pinesboro Herald is the only local newspaper in the city of Pinesboro....

    Question 4 [22 marks] Pinesboro Herald is the only local newspaper in the city of Pinesboro. The publisher faces the demand schedule shown in the first table below and has the cost schedule shown in the second table. Price (dollars per copy) Quantity demanded (copies per day) 0.40 500 0.50 400 0.60 300 0.70 200 0.80 100 0.90 0 Quantity produced (copies per day) Total cost (dollars per day) 0 100 100 105 200 120 300 145 400 180 500...

  • e w E R ullo -shite zxc vel 3) This exercise will explore an externality. (40...

    e w E R ullo -shite zxc vel 3) This exercise will explore an externality. (40 pts) Passenger vehicles in the City of Berwick emit particulate matter (PM) pollution that has an adverse effect on residents. The local university has determined that the marginal social cost of the PM pollution is: MSC = $20,000* And the marginal social benefit of pollution is: MSB = $510,000 - $30,000*Q Where Q = tons of PM emitted. a) What types of factors might...

  • Question 3 1 pts The market for plumbing services in a city can be characterized by...

    Question 3 1 pts The market for plumbing services in a city can be characterized by the model of monopolistic competition. Suppose that the market is in long-run equilibrium. For a typical plumbing firm, price: exceeds average total cost. equals average total cost. is greater than the average for all other firms in the market. is less than average total cost. Question 5 1 pts Price, marginal revenue, marginal cost, average total cost a P. b P2 P3 MC ATC...

  • Consider a city that has cell phone case stands operating throughout the midtown area. Suppose each...

    Consider a city that has cell phone case stands operating throughout the midtown area. Suppose each vendor has a marginal cost of $5.00 per case and no fixed cost. Suppose the maximum number of cell phone cases that any one vendor can sell is 70 per day. If the price of a cell phone case is $15.00, how many cases does each vendor want to sell? B. If the industry is perfectly competitive, will the price remain $15.00 per case?...

  • Based on information given answer the questions below A monopolist has a demand curve given by...

    Based on information given answer the questions below A monopolist has a demand curve given by P = 80 - 4Q and a total cost curve given by TC = 400. 5 The associated marginal cost curve is MC = 40. What is the monopolist's marginal revenue curve? a. MR = 70 - 4Q b. MR = 80 - 8Q c. MR = 70 - 80 d. MR = 56 - Q e. none of the above 6 And what...

  • Use the figure below to answer the following questions. Price (dollars per inhaler) 10 7 4....

    Use the figure below to answer the following questions. Price (dollars per inhaler) 10 7 4. 2 MC MR 0 4 8 1216 20 Quantity (millions) 3) Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2 per inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are shown in Figure 13.4.6. The patent gives Prime Pharmaceuticals...

  • Q1. Sarah has decided to spend always $200 on clothing per month. Which one of the...

    Q1. Sarah has decided to spend always $200 on clothing per month. Which one of the statements below is true? A. Sarah’s price elasticity of demand is one because she is maintaining her clothing expenditures as a constant fraction of the price. B. Sarah’s income elasticity of demand is equal to zero because her clothing expenditure does not depend on the price. C. Sarah’s income elasticity of demand is infinite because she is willing to spend a huge amount of...

  • 33. Gas’n'Go is one of the 20 gas stations in Lafayette, California. The following diagram shows the demand curve (D), marginal revenue curve (MR), marginal cost curve (MC) and average total cost...

    33. Gas’n'Go is one of the 20 gas stations in Lafayette, California. The following diagram shows the demand curve (D), marginal revenue curve (MR), marginal cost curve (MC) and average total cost curve (ATC) for GasN'Go. Assume that the market for gasoline is a monopolistically competitive market. Part 1: Label all curves and identify and label the initial price (P1) and quantity (Q1). Part 2: Suppose that the price of oil increases, causing Gas'n'Go's production costs to also increase (oil...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT