What is total surplus from market after taking into account

Assignment Help Microeconomics

Reference no: EM132192549

Question: The market for a particular chemical, called Negext, is described by the following equations

Demand: Qd=100-5P

Supply:Qs=5P

where Q is measured as units of Negext and P is price in dollars per unit.

b. for each unit of negext produced, 4 units of pollution are emitted, and each unit of pollution imposes a cost on society of$1. Compute the total cost of pollution when the market of Negextis in equilibrium. what is total surplus from this market after taking into account the cost of pollution?

c. Would banning Negext increase of decrease welfare?why?

d. suppose that the government restrict emission to 100 units ofpollution. Graph the Negext market under this contraint. find the new equilibrium price and quantity and show them on your graph.compute how this policy affects consumer surplus, producer surplusand the cost of pollution. Would you recommend this policy?why?

e. suppose that instead of restricting pollution, the government imposes a tax on producers equal to $4 for each unit of chemical produced. calculate the new equilibrium price and quantity, as well as consumer surplus, producer surplus, tax revenue, and the cost of pollution. what is total surplus now?

f. new research finds the social cost of pollution is really higher than $1. how would that change the optimal policy response? is there some cost of pollution that would make it sensible to ban Negext? if so, what is it?

Reference no: EM132192549

Questions Cloud

About potential customers and the competitive environment : Describe the issues that the research should explore. What would you want to know about potential customers and the competitive environment?

Write a paper synthesising organisational change theory : What is the current reality and how did it become so - address any resistance to or other barriers for change - write a paper synthesising organisational change

Routing and scheduling and between routing and zoning : Distinguish between routing and scheduling and between routing and zoning.

What is the minimum time required for each sample conversion : If the highest frequency in "Uptown Funk" is 8 kHz, what is the minimum sampling rate that would need to be used to accurately reconstruct the song?

What is total surplus from market after taking into account : For each unit of negext produced, 4 units of pollution are emitted, and each unit of pollution imposes a cost on society of$1.

Key strength for pepsico portfolio : Which of the following is a key strength for Pepsico's portfolio? Pepsico's financial performance could be best described as.

Involved in creating process strategy : Discuss the types of decisions that are involved in creating a process strategy

Are all services at risk of being offshored : Will services follow the trend of manufacturing in being outsourced and offshored from industrial countries to developing countries?

How would you protect the passwords on your system : How would you protect the passwords on your system using some of the mechanisms we have studied?

User Account

All Pages