An industry faces an inverse demand curve given by: P = 90 - 1.5Q. Let MC...
An industry faces an inverse demand curve given by: P = 90 - 1.5Q. Let MC = 0.5Q before a new environmental-protection regulation and MC=10 + 0.5Q after the regulation.
Determine
a) The cost to consumers from the regulation
b) The social cost of the new regulation
Homework Answers
a)
P = MC
90 - 1.5Q = 0.5Q
90 = 2Q
Q = 90/2
= 45
P =90 -1.5(45)
= 90 -67.5
= 22.5
Output and price after imposition of environmental regulation
90 - 1.5Q =10 + 0.5Q
80 = 2Q
Q = 40
P = 90 - 1.5(40)
= 90 -60
= 30
Loss to consumer:
Loss of Consumer Surplus = 0.5(Base)(Height)
= 0.5 (45)(90-22.5) - 0.5(40)(90-30)
= 318.75
b)
Loss to society:
= 0.5(5)(7.5)
=18.75
=18.75*2
=37.5
Add Answer to:
An industry faces an
inverse demand curve given by: P = 90 - 1.5Q. Let MC...
Suppose an industry facing an inverse demand equation equal to P = 120 - 4Q faces...
Suppose an industry facing an inverse demand equation equal to P = 120 - 4Q faces a new pollution control law that shifts its constant marginal cost of production from C1 = 50 to C2 = 68. a) Compute the competitive market equilibrium price and output before regulation. b) Compute producer surplus, consumer surplus and social surplus before regulation. c) Compute the competitive market equilibrium price and output after regulation. d) Compute producer surplus, consumer surplus and social surplus after...
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q....
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q. The firm's total cost function is C(Q) = 0.5Q² and thus marginal cost function is MC(Q) = Q. (a) Determine the monopoly quantity, price and profit, and calculate the CS, PS and social welfare under the monopoly. (b) Determine the socially optimal outcome and calculate the CS, PS and social welfare under the social optimum. (c) Calculate the deadweight loss due to the monopolist...
The market inverse demand curve for a good is is P = 15 – 1.5Q, where...
The market inverse demand curve for a good is is P = 15 – 1.5Q, where P is the price in dollars. The marginal cost is $0.18. If the two firms in this industry successfully collude as a cartel, the market price will be $_ $4.94 $1.75 $3.62 $0.38 $7.59
24.If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then profit maximization...
24.If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then profit maximization is achieved when the monopoly sets price equal to A) 16. B) 21. C) 25. D) 58. 25. If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then maximum profit A) equals $336. B) equals $882. C) equals $1,218. D) cannot be determined solely from the...
The inverse demand for leather is given by P = 50-0.5Q. The industry supply of leather...
The inverse demand for leather is given by P = 50-0.5Q. The industry supply of leather is determined by its marginal cost: MC = 0.4Q. Unfortunately, the production of leather causes noxious chemical residue to leach into groundwater supplies. The external marginal cost caused by these residues grows with the amount of output, and is measured as EMC = 0.05Q. 1A. How many leather is produced in the free market if the externality is not corrected. B) What is the...
5, The inverse demand curve a pure monopoly faces is P = 120-20. The firm's cost...
5, The inverse demand curve a pure monopoly faces is P = 120-20. The firm's cost curve is TC 10+o (a) Compare the monopoly outcome to that of perfect competition. (b) Determine how much consumers are harmed by monopoly relative to perfect competition (i.e. determine the change in consumer surplus). (c) Determine the deadweight loss ofmonopoly.
1. The inverse demand for leather is given by P = 50 - 0.5Q. The industry...
1. The inverse demand for leather is given by P = 50 - 0.5Q. The industry supply of leather is determined by its marginal cost: MC = 0.4Q. Unfortunately, the production of leather casues noxious chemical residue to leach into groundwater supplies. The external marginal cost caused by these residues grows with the amount of output, and is measured as EMC = 0.05Q. (Graph the inverse demand curve, private marginal cost, and social marginal cost curves.) 1a) How many leather...
In market A, a firm with market power faces an inverse demand curve of P =...
In market A, a firm with market power faces an inverse demand curve of P = 10 – Q and a marginal cost that is constant at $2. In market B, a firm with market power faces an inverse demand curve of P = 8 – 0.75Q and a marginal cost of $2. Producer surplus in market A is _____ than in market B. $4 higher=correct how?
9. Recall that Babe’s Bats faces an inverse demand curve of P = 25-2.5Q and marginal...
9. Recall that Babe’s Bats faces an inverse demand curve of P = 25-2.5Q and marginal cost curve MC = 5Q. Calculate the deadweight loss from market power at the firm’s profit-maximizing level of output.
1. The inverse demand for leather is given by P = 50 - 0.5Q. The industry...
1. The inverse demand for leather is given by P = 50 - 0.5Q. The industry supply of leather is determined by its marginal cost: MC = 0.4Q. Unfortunately, the production of leather casues noxious chemical residue to leach into groundwater supplies. The external marginal cost caused by these residues grows with the amount of output, and is measured as EMC = 0.05Q. (Graph the inverse demand curve, private marginal cost, and social marginal cost curves.) 1a) How many leather...
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q. The firm's total cost function is C(Q) = 0.5Q² and thus marginal cost function is MC(Q) = Q. (a) Determine the monopoly quantity, price and profit, and calculate the CS, PS and social welfare under the monopoly. (b) Determine the socially optimal outcome and calculate the CS, PS and social welfare under the social optimum. (c) Calculate the deadweight loss due to the monopolist...
The market inverse demand curve for a good is is P = 15 – 1.5Q, where P is the price in dollars. The marginal cost is $0.18. If the two firms in this industry successfully collude as a cartel, the market price will be $_ $4.94 $1.75 $3.62 $0.38 $7.59
24.If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then profit maximization is achieved when the monopoly sets price equal to A) 16. B) 21. C) 25. D) 58. 25. If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then maximum profit A) equals $336. B) equals $882. C) equals $1,218. D) cannot be determined solely from the...
5, The inverse demand curve a pure monopoly faces is P = 120-20. The firm's cost curve is TC 10+o (a) Compare the monopoly outcome to that of perfect competition. (b) Determine how much consumers are harmed by monopoly relative to perfect competition (i.e. determine the change in consumer surplus). (c) Determine the deadweight loss ofmonopoly.
Most questions answered within 3 hours.
-
Which of the following is a provision of
NAFTA?
A.
Common accounting rules
B.
Adding new...
asked 5 minutes ago -
Need to do in Python? Can do in Javascript but not in Python
Write a function...
asked 20 minutes ago -
Industry: Telecommunications in India
Here, you need to discuss the sources of the growth pattern
and...
asked 1 hour ago -
Hydrobromic acid
dissolves solid iron according to the followiaung reaction:
Fe(s)+2HBr(aq)→
FeBr2(aq)+ H2(g)
Part A. What...
asked 3 hours ago -
Verify the following vector identity in SPHERICAL
COORDINATES.
div(curl(A)) = 0
asked 5 hours ago -
The work function (Φ) for a metal is 7.50×10-19 J.
What is the longest wavelength (nm)...
asked 5 hours ago -
1. Would the following procedural changes cause the
calculated mass percent Ni2+ ion in Ni(NH3)nCl2 to...
asked 7 hours ago -
1. Why does the voltage of the capacitor vary with frequency?
where does this missing voltage...
asked 8 hours ago -
p p please write each step out clearly
3. A manager of a company is considering...
asked 7 hours ago -
On October 1, Ebony Ernst organized Ernst Consulting; on October
3, the owner contributed $83,540 in...
asked 8 hours ago -
A.)As an electron moves through a region of space, its speed
decreases from 9.60 × 106...
asked 8 hours ago -
In java with the netbeans program do:
Through object programming
Create a class "ContadorP", which is...
asked 8 hours ago