An ice-cream factory produces output at c

Reference no: EM13695289

An ice-cream factory produces output at C = q
2
, where q is the quantity of
ice-creams produced, in tons. In addition, 2 units of emissions are produced for each ton of icecreams (e = 2q). Pollution damage is $2 for each unit of emissions, which leads the government to charge $2 per unit of emissions as a Pigovian fee. The firm's output sells competitively for $10 per ton.
4.1. [15 points] How many tons of ice-creams will the factory produce? How much does it pay in emission fees? What are its profits?
4.2. [15 points] A device is invented that would reduce the firm's emissions to one unit for each town of output (e = q). How much would the firm be willing to pay for such a device?

Reference no: EM13695289

Questions Cloud

Model contain autoregressive conditional heteroskedasticit : If the errors in a regression model contain autoregressive conditional heteroskedasticit

Benchmark the codes of conduct used by similar companies : 1. Briefly describe your company and then benchmark the codes of conduct used by similar companies in the industry. Critique the codes of conduct of at least three (3) similar companies in order to write codes for your company.

Performance organization and hrm technology : Performance Organization and HRM Technology written assignment.

Discuss advantages and disadvantages of introduction : Discuss advantages and disadvantages of introduction into the United States market of the world's cheapest auto, India's the "Tata Nano." and a further research that needs to be done.

An ice-cream factory produces output at c : An ice-cream factory produces output at C

What have they done lately : What have they done lately

Cost function exhibit economies or diseconomies of scale : For what value of Q does the cost function exhibit economies or diseconomies of scale?

Fiscal incentives : Fiscal incentives

State the basic rules of formal reasoning : State the basic rules of formal reasoning

User Account

All Pages