Deadweight loss compared to the solution

Assignment Help Business Economics
Reference no: EM133084257

1. There are 4 ?rms in the industry that have the total costs of eliminating pollution given by 132/4, 132/3, 132/2 and P2 respectively.

(a) Suppose that we want to reduce aggregate pollution in a way that minimizes the overall cost. Derive the marginal cost of doing so as a function of the overall reduction in pollution P*

(b) Suppose we want to reduce the overall pollution by 100 units. How much should each of the ?rms reduce pollution by in order to minimize the overall cost of doing so?

(c) Suppose that we require each firm to reduce pollution by 30 units. Firms are allowed to trade obligations to lower their pollution reduction requirements. What will be the competitive market price of a unit of pollution reduction and how many units will be traded? ((1) Suppose we do not allow ?IIIIS to trade in part (c). What would be the deadweight loss compared to the solution in part (c)

Reference no: EM133084257

Questions Cloud

Create great variations in the price of ticket : Why airlines would create such great variations in the price of a ticket depending on when it is purchased and the day and time the flight departs. Assume that
Discuss the determinants of demand and supply : 1. Determine which of the two (2) investment projects your supervisor should choose, given a discount rate of 10% from J P Morgan Chase bank. The first project
What is leadership paradox : What is the leadership paradox? Give some reasons why a leader can encounter difficulty in newly formed teams or groups using a participative management system
Determine the optimal investment project : Determine which of the two (2) investment projects your supervisor should choose, given a discount rate of 10% from J P Morgan Chase bank.
Deadweight loss compared to the solution : 1. There are 4 ?rms in the industry that have the total costs of eliminating pollution given by 132/4, 132/3, 132/2 and P2 respectively.
What is the main role of media access control : Describe the main role of data link LLC - What is the main role of Media Access Control component of data link layer
Large number of independent loan prospects : A large number of independent loan prospects are available, each paying a net return (on $100) of $24 with probability 1/4 and $4 with probability 3/4.
Build full risk management plan : Build a full risk management plan, including a complete risk matrix for a project for a wedding including the wedding itself, the reception and the dinner.
Explain substitution and income effects : 1. Suppose that an individual in Japan has preferences represented by the following utility function: U C C 0 ( C 0 , 1 ) = l n ( ) + (1/1+rho) ln(C1)

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd