Homework Answers
1. An unregulated market is likely to produce too much of a good compared with the socially optimal output when negative externality exist, for eg in case of pollution.
2. When firm leaves a perfectly competitive market, other things equal, market price will decrease and market price will rise till the losses are wiped from the market. This ensures the normal profits for firm's in the long run.
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Question 39 (Mandatory) (5 points) An unregulated market is likely to produce too much of a...
A Market for Tomatoes The graph below shows an unregulated competitive market for tomatoes, where S...
A Market for Tomatoes The graph below shows an unregulated competitive market for tomatoes, where S is the supply curve and D is the demand curve. Question 31 (1 point) In the scenario above, the equilibrium price of tomatoes is _____ per pound and the equilibrium quantity is _____ million pounds. $4.00; 6 $2.40; 7 $3.20; 8 $2.40; 10 $4.00; 9 In the scenario above, suppose the current price of tomatoes is $4 per pound. What quantity of tomatoes will...
Question 19 (Mandatory) (5 points) In short-run equilibrium, a firm in a monopolistically competitive market produces...
Question 19 (Mandatory) (5 points) In short-run equilibrium, a firm in a monopolistically competitive market produces at a level of output at which OA) no new entry will occur. OB) the revenue generated by selling an additional unit is equal to the cost of producing the additional unit. C) the firm breaks even. D) the revenue per unit is equal to the cost per unit. Question 20 (Mandatory) (5 points) A natural monopoly OA) is a market in which long-run...
Question 5 (Mandatory) (1 point) In the theory of perfect competition, a) the market demand curve...
Question 5 (Mandatory) (1 point) In the theory of perfect competition, a) the market demand curve is horizontal. b) the single firm faces a horizontal demand curve. ed c) the single firm faces a downward-sloping demand curve. d) the market demand curve is downward sloping. b and d Question 6 (Mandatory) (1 point) The perfectly competitive firm will seek to produce the level of output for which
6. (16 points) Suppose we realize that the market described in question 1 (Market demand is...
6. (16 points) Suppose we realize that the market described in question 1 (Market demand is still Q = 18 – P) has a negative externality. The cost function C(Q) = Q2 is private cost. We now know the cost of the externality is Ca(Q)=Q?. a. What is the marginal cost of the externality, MCE? b. What is the marginal cost to society of production MCS? c. What is the Socially Optimal quantity and price? d. How does the socially...
Please help with these questions, Question 5 0.16 pts When firms in a market expect the...
Please help with these questions,
Question 5 0.16 pts When firms in a market expect the price of their products to rise, the supply curve of their goods causing the equilibrium price to O decreases; rise increases; rise and the equilibrium quantity to fall decreases; fall increases; fall O increases; rise Question 6 0.16 pts Taxes cause the equilibrium price of a good to Ogo up only for producers. O decrease O go down only for consumers O increase. remain...
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for...
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $385 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel, Use the purple points (diamond symbol) to...
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for...
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for paper. Suppose that a paper factory dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the factory. Producing an additional ton of paper imposes a constant external cost of $150 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for paper. Use the purple points (diamond symbol) to plot...
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for...
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $315 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel. Use the purple points (diamond symbol) to...
3. The effect of negative externalities on the optimal quantityof consumption Consider the market for bolts....
3. The effect of negative externalities on the optimal quantityof consumption Consider the market for bolts. Suppose that a hardware factory dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the factory. Producing an additional ton of bolts imposes a constant external cost of $330 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for bolts. Use the purple points (diamond symbol) to plot the...
at a Drag the words into the correct boxes Market occurs when all Net have been...
at a Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will Supply equal and Marginal will equal Costs. This also occurs efficiency when there is no Loss before Net Benefits are all captured when the sum of Consumer and Surplus is greater maximised and there is no under or production or produces Price ceilings set equilibrium are said to be binding. This is because the market results in a where...
Question 19 (Mandatory) (5 points) In short-run equilibrium, a firm in a monopolistically competitive market produces at a level of output at which OA) no new entry will occur. OB) the revenue generated by selling an additional unit is equal to the cost of producing the additional unit. C) the firm breaks even. D) the revenue per unit is equal to the cost per unit. Question 20 (Mandatory) (5 points) A natural monopoly OA) is a market in which long-run...
Question 5 (Mandatory) (1 point) In the theory of perfect competition, a) the market demand curve is horizontal. b) the single firm faces a horizontal demand curve. ed c) the single firm faces a downward-sloping demand curve. d) the market demand curve is downward sloping. b and d Question 6 (Mandatory) (1 point) The perfectly competitive firm will seek to produce the level of output for which
6. (16 points) Suppose we realize that the market described in question 1 (Market demand is still Q = 18 – P) has a negative externality. The cost function C(Q) = Q2 is private cost. We now know the cost of the externality is Ca(Q)=Q?. a. What is the marginal cost of the externality, MCE? b. What is the marginal cost to society of production MCS? c. What is the Socially Optimal quantity and price? d. How does the socially...
Please help with these questions,
Question 5 0.16 pts When firms in a market expect the price of their products to rise, the supply curve of their goods causing the equilibrium price to O decreases; rise increases; rise and the equilibrium quantity to fall decreases; fall increases; fall O increases; rise Question 6 0.16 pts Taxes cause the equilibrium price of a good to Ogo up only for producers. O decrease O go down only for consumers O increase. remain...
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $385 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel, Use the purple points (diamond symbol) to...
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for paper. Suppose that a paper factory dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the factory. Producing an additional ton of paper imposes a constant external cost of $150 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for paper. Use the purple points (diamond symbol) to plot...
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $315 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel. Use the purple points (diamond symbol) to...
3. The effect of negative externalities on the optimal quantityof consumption Consider the market for bolts. Suppose that a hardware factory dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the factory. Producing an additional ton of bolts imposes a constant external cost of $330 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for bolts. Use the purple points (diamond symbol) to plot the...
at a Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will Supply equal and Marginal will equal Costs. This also occurs efficiency when there is no Loss before Net Benefits are all captured when the sum of Consumer and Surplus is greater maximised and there is no under or production or produces Price ceilings set equilibrium are said to be binding. This is because the market results in a where...
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