Cumulative external cost of production, Macroeconomics

Assignment Help:

A textile mill releases pollution into nearby wetlands, and the associated health and ecological damages are not considered in the private market. Suppose you observe the following market structure:

MPB= 800- .5Q MPC= 20+ .3Q
MEB = 0 MEC= .4Q

A. Find the competitive equilibrium, Qc and Pc, and the efficient equilibrium, Qe and Pe.
B. Graph these curves and clearly mark the differences between these two equilibriums. You do not need to worry about scale or accurately depicting their slopes relativ to each other, your graph just needs to be qualitatively correct.
C. What is the level of deadweight loss at the competitive outcome, relative to the efficient outcome?
D. Suppose the textile mill owned the rights to the wetlands, and it is negotiating with a private environment groups that is willing to pay the mill to produce less output. For the 800th unit of output, determine the range within which a payment would be acceptable to both parties.
E. At an output of 800 units, what is the cumulative external cost of production?


Related Discussions:- Cumulative external cost of production

How commercial banks create money, Q. How commercial banks create money? ...

Q. How commercial banks create money? Commercial banks clearly can't influence the amount of currency in economy or monetary base because they aren't allowed to print money. Th

Personal income tax is progressive, Because the structure of the personal i...

Because the structure of the personal income tax is progressive, a larger share of income is taxed at higher rates as real income increases. Therefore, economic growth automaticall

Aggregate production function, The aggregate production function Defin...

The aggregate production function Definition Imagine the national economy during a short period of time (say one week). We refer:  L: total amount of work used duri

Gdp, explain the structure of the economy and its impact on the gdp of soun...

explain the structure of the economy and its impact on the gdp of sountry.

Current macroeconomics problems, In order to encourage you to take interest...

In order to encourage you to take interests in the current affairs in business, and have more concerns about the real world problems (which is what economics is about), you are req

Willing to hold money, Was money a better store of value in the United Stat...

Was money a better store of value in the United States in the 1950s than it was in the 1970s? Why or why not? In which period would you have been willing to hold money? Which one w

Major brokerage firm advised, Suppose a major brokerage firm advised its cl...

Suppose a major brokerage firm advised its clients to buy cigarette stocks under the assumption that, if consumer incomes rise by 50% as expected over the next decade, cigarette sa

#GDP, There are three firms in an economy: A, B, and C. Firm A buys $450 wo...

There are three firms in an economy: A, B, and C. Firm A buys $450 worth of goods from firm B and $260 worth of goods from firm C, and produces 260 units of output, which it sells

Explain the price elasticity of demand, List the 3 factors that determine t...

List the 3 factors that determine the price elasticity of demand? State the factor that determines the price elasticity of supply?

Write Your Message!

Captcha
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