Consider the market for a Hepatitis A vaccine. The market demand or private marginal benefit schedule...
Consider the market for a Hepatitis A vaccine. The market demand or private marginal benefit schedule is given by P = 80 – 0.25Qd, where Qd is the number of vaccines demanded per month and P is the price per vaccination. The market supply for the vaccine is (Private marginal cost schedule) is P = 15 + 0.4Qs, where Qs is the number of vaccines supplied per month. a. Draw a graph of the market and solve the number of for the number of vaccinations purchased per month. b. The hepatitis A vaccination generates external benefits of. If the external marginal benefit schedule is MEB = 35 – 0.15Q, find the efficient number of vaccinations per month. c. Suppose the government decides to subsidize the price of the hepatitis vaccination. Find the optimal subsidy. Who gains and loses under the plan?
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Consider the market for a Hepatitis A vaccine. The market demand
or private marginal benefit schedule...
Consider a hypothetical market for the hepatitis A vaccine. The market demand (or private marginal benefit...
Consider a hypothetical market for the hepatitis A vaccine. The market demand (or private marginal benefit schedule) is given as: P = 80 -0.25Qd where Qd denotes the number of vaccinations demanded per month and P is the price per vaccination. The market supply for the vaccine (the private marginal cost schedule) is: P = 15 + 0.4Qs where Qs denotes the number of vaccinations supplied per month. a. Sketch a graph of the market and solve for the number...
A certain production process generates both external costs and external benefits. The marginal private cost (NPC/and...
A certain production process generates both external costs and external benefits. The marginal private cost (NPC/and marginal external cost (MEC) functions are Increasing. while the marginal private benefit (MPB and marginal external benefit (MEBlfunctions are decreasing. The socially optimal (SO) as well as the individually rational (IR) output level are given by positive and finite numbers. When will the IR output level be higher than the SO one? provided that MEC SO-MEB SO b) provided that MEC SO MEB so...
Suppose demand is QD = 16 - P supply is QS = P. There is a...
Suppose demand is QD = 16 - P supply is QS = P. There is a constant positive externality of $4 per unit (Marginal External Benefit, MEB = $4). a. Draw the graph of the MC, MB and MSB curves. Identify the level of the intercepts. b. Calculate total surplus if the market is at the point where MC=MB. c. What is the DWL loss at this point (MC=MB)? Identify on your graph. d. Calculate total surplus if the market is at...
Suppose demand is QD = 16 - P supply is QS = P. There is a...
Suppose demand is QD = 16 - P supply is QS = P. There is a constant positive externality of $4 per unit (Marginal External Benefit, MEB = $4). a. Draw the graph of the MC, MB and MSB curves. Identify the level of the intercepts. b. Calculate total surplus if the market is at the point where MC=MB. c. What is the DWL loss at this point (MC=MB)? Identify on your graph. d. Calculate total surplus if the market...
Suppose the demand (i.e. the private marginal benefit) for industrial grade stink bombs is given by...
Suppose the demand (i.e. the private marginal benefit) for industrial grade stink bombs is given by P=300-2Q and supply (i.e. the private marginal cost) for is given by P=Q. Also, suppose that the marginal external damage of consuming this product is $60 per stink bomb. a. What is the equilibrium quantity of stink bombs sold and consumed? b. What is the socially optimal equilibrium quantity of stink bombs sold and consumed? c. Considering your answers to (a) and (b), are...
Suppose marginal benefit is given by P-9 Q, marginal private cost is given by P-2Q, and...
Suppose marginal benefit is given by P-9 Q, marginal private cost is given by P-2Q, and marginal external cost 1S 2 What is the socially optimal price? 5. What is the deadweight loss? 6. How much would a corrective (Pigouvian) tax need to be to move the market equilibrium to the socially optimal equilibrium?
Suppose the private market for apartments is perfectly competitive with no distortions or market failures. The...
Suppose the private market for apartments is perfectly competitive with no distortions or market failures. The government is contemplating a project to build 200 apartments. Existing analysis indicates that the current market demand for apartments is given as: Qd =5000 −5P and the market supply is: Qs =5P . Quantity is measured as the number of apartments rented per month at price P. You are part of a team hired by the government to undertake a cost-benefit analysis of the...
Figure 1 shows the marginal private benefit from college education at an Imaginary college. The marginal...
Figure 1 shows the marginal private benefit from college education at an Imaginary college. The marginal cost of a college education in this example is a constant $6,000 per year. The marginal external benefit from a college education is $4,000 per student per year. FIGURE 1 $10,000 $9,000 SHOP $7,000 PRICE OF TUMON 56,000 $5,000 $4.000 $3.000 52,000 1.000 1.500 4,000 4,500 2,500 3.500 STUDENTS PER YEAR 5.000 a) If colleges were private and government had no involvement in college...
In a market, demand is given by P = 100 − Q and the (private) marginal...
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...
Figure 1 shows the marginal private benefit from college education at an imaginary college. The marginal...
Figure 1 shows the marginal private benefit from college education at an imaginary college. The marginal cost of a college education in this example is a constant $6,000 per year. The marginal external benefit from a college education is $4,000 per student per year. FIGURE 1 $10,000 $9,000 $8,000 57,000 PRICE OF TUITION $6,000 $5,000 $4,000 $3,000 $2.000 1.000 1,500 2.000 2.500 3.000 3,500 STUDENTS PER YEAR 4,000 4,500 5.000 a) If colleges were private and government had no involvement...
Consider a hypothetical market for the hepatitis A vaccine. The market demand (or private marginal benefit schedule) is given as: P = 80 -0.25Qd where Qd denotes the number of vaccinations demanded per month and P is the price per vaccination. The market supply for the vaccine (the private marginal cost schedule) is: P = 15 + 0.4Qs where Qs denotes the number of vaccinations supplied per month. a. Sketch a graph of the market and solve for the number...
A certain production process generates both external costs and external benefits. The marginal private cost (NPC/and marginal external cost (MEC) functions are Increasing. while the marginal private benefit (MPB and marginal external benefit (MEBlfunctions are decreasing. The socially optimal (SO) as well as the individually rational (IR) output level are given by positive and finite numbers. When will the IR output level be higher than the SO one? provided that MEC SO-MEB SO b) provided that MEC SO MEB so...
Suppose marginal benefit is given by P-9 Q, marginal private cost is given by P-2Q, and marginal external cost 1S 2 What is the socially optimal price? 5. What is the deadweight loss? 6. How much would a corrective (Pigouvian) tax need to be to move the market equilibrium to the socially optimal equilibrium?
Figure 1 shows the marginal private benefit from college education at an Imaginary college. The marginal cost of a college education in this example is a constant $6,000 per year. The marginal external benefit from a college education is $4,000 per student per year. FIGURE 1 $10,000 $9,000 SHOP $7,000 PRICE OF TUMON 56,000 $5,000 $4.000 $3.000 52,000 1.000 1.500 4,000 4,500 2,500 3.500 STUDENTS PER YEAR 5.000 a) If colleges were private and government had no involvement in college...
Figure 1 shows the marginal private benefit from college education at an imaginary college. The marginal cost of a college education in this example is a constant $6,000 per year. The marginal external benefit from a college education is $4,000 per student per year. FIGURE 1 $10,000 $9,000 $8,000 57,000 PRICE OF TUITION $6,000 $5,000 $4,000 $3,000 $2.000 1.000 1,500 2.000 2.500 3.000 3,500 STUDENTS PER YEAR 4,000 4,500 5.000 a) If colleges were private and government had no involvement...
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