If the MC = q, which is the marginal abatement costs, and MB= 10-q, which is...
If the MC = q, which is the marginal abatement costs, and MB= 10-q, which is the marginal benefits of abatement, what are the welfare gains from socially optimal regulations?
Homework Answers
In social optimal, MB = MC.
10 - q = q
2q = 10
q = 5
P = 5
When q = 0, MB = 10
Consumer surplus (CS) = (1/2) x (10 - 5) x 5 = 2.5 x 5 = 12.5
When q = 0, MC = 0
Producer surplus (PS) = (1/2) x (5 - 0) x 5 = 2.5 x 5 = 12.5
Total welfare gain = CS + PS = 12.5 + 12.5 = 25
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of pollution abatement in Vietnam is MB=280-30A, and the marginal
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Hello,
I would really appreciate help on this problem with a step by
step solution. Please complete all parts of the problem. Thank you
so much!
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