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Exercise) Consider the private marginal cost function (PMC) is given by PMC 2 + ' and...
Question 3 1pts Consider the market for political advertising during an election campaign. The private marginal cost of producing a political advertisement is PMC 200 +2Qwhere Q is the quantity of advertisements, and the private marginal benefit (demand) curve is PMB 1000 3Q. The marginal negative production externality e in the market is e-3Q (note that the externality from producing an additional advertisement increases with the number of advertisements). Which of the following statements is true? The socially efficient level...
2. The firms in a particular competitive industry produce one unit of pollution along with each unit of their output. A government could tax the producers on each unit of their output. Alternatively, it could give cach firm a certain number of permits and allow the firms to trade permits, while requiring that they own a permit for each unit of output they produce. Possible private and social marginal cost curves (PMC and SMC) and social marginal benefit curves (SIB)...
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...
Consider an industry where firms have a production function with private marginal cost ??? (?) = 40 + 2? and an additional (external) marginal cost to society of ??? (?) = ?/4. The market is characterized by the inverse demand function ?(?) = 400 − 2?. 1. Find the equilibrium in the competitive market. Calculate the (private) producer and consumer surplus in this case. 2. Find the equilibrium if the market is monopolized. Calculate the (private) producer and consumer surplus...
LLUN E l Plashcards | Quizlet Sa = Marginal social cost S = Marginal private cost Demand Q Q Quantity Figure 1 shows a market with a negative extemality - Q + Refer to Figure 1. The efficient output level is Qd. Q6. Qb-Qd.
cost of cleanup is constant at $120 per unit. What is the optimal level of pollution cleanup in each of the two regions? 12. The private marginal benefit associated with a product's consumption is PMB = 350 – 4Q and the private marginal cost associated with its production is PMC = 6Q. Furthermore, the marginal external damage associated with this good's production is MD = 4Q. To correct the externality, the government decides to impose a tax of T per...
Pick the 2 ideal answers: In a free market, efficient firms produce where (Marginal private cost/Marginal Social Cost) equals (marginal private benefit/Marginal Social Benefit)
1. A monopoly is facing an inverse demand curve that is
p=200-5q. There is no fixed cost and the marginal cost of
production is given and it is equal to 50.
Find the total revenue function.
Find marginal revenue (MR).
Draw a graph showing inverse demand, MR, and marginal cost
(MC).
Find the quantity (q) that maximizes the profit.
Find price (p) that maximizes the profit.
Find total cost (TC), total revenue (TR), and profit made by
this firm.
Find...
Consider a marginal damage function as following; the MD
initially rises with the amount of
pollution (M), however, when some critical level is reached, an
individual who can no longer
tolerate leaves such that the damage to them becomes zero. When
many individuals are affected
and they have different tolerance levels to the increasing
concentrations, the sum of MD begins to
fall as depicted in the diagram below. The MB function is of
conventional shape.
Identify the efficient point(s) on...
3) Assume that the market for energy efficient window installations in San Diego is perfectly competitive. Quarterly inverse supply and inverse demand are: P 1200 3Q (Private MB) P 440Qs (Private MC) neighbors (lowering the overall price of electricity, reducing pollution, and so on) These external benefits to consumers are estimated to be EMB 2Q (the more windows installed, the more external benefit to installing more windows). a) Find the equilibrium price and quantity that will be produced in a...