Question

Given the graph information, what ares these values??

Many municipalities are concerned about the environmental impact of plastic bags, which often end up as litter, clogging drains, and hanging from tree branches. A town is considering whether to impose a tax on plastic bags to be collected at the store or a per person quota. Cindy and Carl are two average citizens who both use plastic bags when they go grocery shopping. Plastic bags are currently free when they shop. The figures below show each individual's demand curve for plastic bags. (A) Quota (B) Tax Price ($) Price (S) , Quota 1.0 0.9 08 0.7 06 0.5 0.9 0 8 0.7 0.5 04 0 3 Cindy 0.3 02 0.1 Carl Carl 0.1 o o 15 20 2s 0 35 40 45 50 5 6 0 5 10 15 20 25 30 35 40 45 50 55 60 Quantity of plastic bags Quantity of plastic bags

Answer 1

Q1) for Cindy : $.6, for Carl : $ .3

Since Demand curve is Willingness to Pay curve , so with quota , both can buy at max 20 units of plastic bags.

Thus from their respective demand curves, we find the price for 20 bags as their willingness to pay

Q2) for Carl : 10 bags, Cindy : 30

With tax of .4 , we find the quantity where horizontal line cuts the demand curves

Q3) willingness to pay for the last bag is zero for both, bcoz the Demand curve cuts the x axis at price equals to 0