What is the socially optimal output level

Assignment Help Business Economics
Reference no: EM131715251

Market supply in a competitive industry is p = Q. Demand is p = 100 - Q. Production creates pollution with a social cost of $1 per unit of output. In response to environmentalists, the government creates a tax of $2 per unit. Is overall welfare improved or reduced by the tax?

a) Find the total welfare when the government does not intervene. 

b) What is the socially optimal output level? And the total welfare at this level of output?

c) When the government imposes a tax of $2 per unit, calculate the DWL created by the excessive tax.

Reference no: EM131715251

Questions Cloud

Compute the anticipated return after financing costs : Compute the anticipated return after financing costs with the most aggressive asset-financing mix
Determine the unemployment taxes : The state unemployment rate for Ford is 5.1%. Determine the unemployment taxes (FUTA and SUTA) that would be paid by each company
How viterbi algorithm can be used to extend the kernighan : The Viterbi algorithm can be used to extend a simplified version of the Kernighan et al. (1990) spelling error correction algorithm.
Ministry of business innovation and employment : In August a representative of the Labour inspectorate - the government agency from the Ministry of Business Innovation and Employment
What is the socially optimal output level : What is the socially optimal output level? And the total welfare at this level of output?
Industries and cultures for csr implementation : Discuss the variations among companies, industries and cultures for CSR implementation. Do you have examples?
Determine observations for the given argument : To attune your ears to pronunciation reduction, listen for the pronunciation of the word the, a, or to in the spoken language around you.
What is the present value of a perpetual stream : What is the present value of a perpetual stream of cash flow that pays $80,000 at the end of one year and grows at a rate of 5% indefinitely
Prepare in general journal on the consolidated statements : Prepare in general journal form all entries necessary on the consolidated statements work-papers to eliminate the effects of the inter-company sales for 2013

Reviews

Write a Review

Business Economics Questions & Answers

  787b stimulus bill approvedwashington-less than one month

787b stimulus bill approvedwashington-less than one month after president obama took office congress last night passed

  The economy experiences a business cycle contraction

Explain how the following events will affect the demand for money according to the portfolio theories of money? demand: The economy experiences a business cycle contraction. Brokerage fees rise?, making bond transactions more expensive. The stock mar..

  Addressing recession using fiscal and monetary policy tools

Addressing recession using Fiscal and Monetary Policy tools. Scenario - The US economy is currently experiencing recession. You have Fiscal and Monetary policy tools available to address this problem: To attack the problem of recession, you must sele..

  Finding the required interest rate

Finding the required interest rate Your parents will retire in 15 years. They currently have $270,000, and they think they will need $850,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any ad..

  Q two soft drinks sit side-by-side in a grocery store a

q. two soft drinks sit side-by-side in a grocery store a six-pack of coca-cola a brand name sells for 3.00 while a

  Monopolist with a straight-line demand curve

A monopolist with a straight-line demand curve finds that it can sell one unit at $9 each or nine units at $1 each. Its marginal cost is constant at $2 per unit.

  Find more shrinking-more corruption

Explain why you tend to find more shrinking, more corruption, and more inefficiency in large firms than you do in small firms and explain why you tend to find more shrinking, more corruption, and more inefficiencies in government than you do in large..

  Whether an organization has fulfilled a certain objective

_____ is especially important to lower-level managers who interact daily with the employees operating the organization. Determining whether an organization has fulfilled a certain objective is most closely associated with which of the following manag..

  Economic assumption more is better good fit for real world

Why is the economic assumption "more is better" a good fit for the real world?

  Determining the moneyball discussion

1. Which is more "cartel-like", the English Premier League or the NCAA?

  Calculate amount-demand deposits-money market mutual funds

Given the following information for November 2010, calculate the amounts of M1 and M2 in November 2010. The amounts are in billions of dollars. Demand deposits, Money market mutual funds, Savings deposits, including money market deposit accounts

  As result of the recession

As a result of the recession that began in 2007 and continued into 2009, the unemployment rate rose to as high as 10 percent. By the time of the congressional elections of 2010, the economic recovery was under way, but the unemployment rate was still..

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