Question

S o there are two industries, machine tools and laundry, and the emissions from machine de manufacturing negatively affect the laundry profits. Now, assume the two industries merge. What will be the effect of this merger on emission levels? Does this merger result in a positive or negative change in the outputs of these two industries (you may use a graph for your answer). 5) Explain when a good or bad is considered non-rival. Show an example of a non-excludable and rival good, Graphically illustrate how to find the aggregate demand for non-rival goods e) Many states use container redemption programs to encourage reuse of glass bottles and other recyclable containers. Suppose a state has a current redemption program that imposes a 10-cent per container fee, and then the state increases the fee to 15 cents per container. What is the expected impact of this change on the optimal quantity of unredeemed (scrapped) containers?

Answer 1

Answer

1. Merger of Machine tools and laundry might have positive and negative effects as if we consider positive effect then that factory setup for machines tools and laundry kept on the different place then they might not affect quality or profitability of each other. We can also consider there divisional setup on the different location that will not have effect on production of two different industries.
2. We consider a good non rival, if cost of providing it to every additional consumer or marginal consumer is considered zero. It means that non rival goods can be used by every customer and it is public in nature because goods produced by government are considered as non rival in nature because they are equally available to each and every customer. Examples of non rival goods are use of public roads, national defense, and opposite to it non rival goods are considered as bad when its consumption by one consumer stop other from consuming it, means goods produced by non government (private producer) can be used by one consumer at a time stop other from consuming it. For example website domain name selected by one cannot be used by other. We consider it as rival goods like food, clothing, cars, parking spaces.
3. Quantity of scrapped containers will be reduced as price increase by 5 cent per container so people use less container in their daily life, second, usage of raw material in manufacturing container will be less in the near future. Thirdly, income from container will be used for people who can not afford to use them and benefits of collected money will be distributed for poor people.