Find the aggregate marginal damage for the public bad

Assignment Help Microeconomics

Reference no: EM131778330

Qusetion: Two types of consumers (workers and retirees) share a community with a polluting cheese factory. The pollution is nonrival and nonexcludable. The total damage to workers is p^2 where p is the amount of pollution and the total damage to retirees is 3p^2. Thus marginal damage to workers is 2p and maginal damage to retirees s 6p. According to an analysis by consulting eingineers, the cheese factory saves 20p-p² by pollouting p, for a marginal savings 20-2p.

a) Find the aggregate (including both types of consumers) marginal damage for the public bad.

b) Graph the marginal savings and aggregate marginal damage curves with polloution on horizontal axis.

c) How much will the cheese factory pollute in the absence of any regulation or bargaining? What is this society's optimal level of pollution?

d) Starting from the uncontrolled level of pollution claculated in part c, find the marginal willingess to pay for polloution abatement, A, for each consumer class (Abatement is reduction in pollution; zero abtement would be associated with the unctrolled level of pollution.) Find the aggegate marginal willingness to pay for abatement.

e) Again starting from the uncontrolled level of pollution, what is the firm's marginal cost of pollution abatement? What is the optimal level of A?

Reference no: EM131778330

Questions Cloud

Construct a pro forma income statement and balance sheet : Using a publicly held company, access the company's Web page on the Internet - construct a pro forma income statement and balance sheet for the company

Research the laws associated with physician -assisted : Research the laws associated with physician-assisted suicide.What is your state's or province's position on physician-assisted suicide?

What is the net realizable value of sorter company accounts : What is the net realizable value of Sorter Company's accounts receivable after the write-off of the Ordonez receivable

Evaluate the initial purchase : Evaluate the initial purchase to determine whether either goodwill or incremental asset values need to be reflected within the equity method procedures

Find the aggregate marginal damage for the public bad : Two types of consumers (workers and retirees) share a community with a polluting cheese factory. The pollution is nonrival and nonexcludable.

Assess your feelings about the process : What ethical factors and principles did you consider when completing the documents? Assess your feelings about the process.

Fdr fireside chats : Roosevelt worked hard to gain the trust of the common man, and the new technology of the radio proved to be one of his most effective tools.

Describe what you view as an issue or a problem : Describe what you view as an issue or a problem? In other words, what makes it a problem? What factors contribute to this problem?

What is the amount of symantec gross sales : What is the amount of Symantec's gross sales for the 2009 fiscal year? What amount of accounts receivable did Symantec write off during 2009

User Account

All Pages