Marginal social benefit, Microeconomics

Assignment Help:

Consider the following information relating to the pulp market.

 

Demand

 

 

Supply

 

Output(tonnes/ day)

Marginal private benefit

Marginal social benefit

Output

(tonnes/day)

Marginal private cost

Marginal social cost

1

$140

 

1

$50

 

2

$120

 

2

$60

 

3

$100

 

3

$70

 

4

$80

 

4

$80

 

5

$60

 

5

$90

 

a. If this market considers only marginal private benefit and marginal private cost, how much pulp will be produced and at what price will it be sold?

b. Assume that pulp mills provide no external benefits and that each tonne of pulp generates $30 of external costs. Complete the table by entering the data for the columns headed 'Marginal social benefit' and 'Marginal social cost'.

c. What would be the socially optimal quantity of pulp produced and the socially optimal price at which will it be sold?


Related Discussions:- Marginal social benefit

What is the difference between gdp and gnp, What is the difference between ...

What is the difference between GDP and GNP?  Gross domestic product (GDP) is the value of the total final output formed inside a country, during a given year. GDP, like all mea

Supply and demand with graphs, Supply function given by equation QS = 3P - ...

Supply function given by equation QS = 3P - 50. Write an equation proposals if: a) Government introduces subsidies of 5 $ per unit; b) the government introduced subsidies of 15%

Labor economics, Suppose that Congress increases the minimum wage to $10 an...

Suppose that Congress increases the minimum wage to $10 an hour. a. Use a supply and demand model for unskilled labor to show the effect on the number of unskilled workers employed

Total cost function, A firm's production function is given by Q = √LK . Th...

A firm's production function is given by Q = √LK . The price of labour is w and the price of capital is r. a. The price of labour is $5 and the price of capital is $20. What is

Pure competition and efficiency, Allocative efficiency criteria are satisfi...

Allocative efficiency criteria are satisfied by the competitive model.  Because P = MC, in each market in the economy there is no over- or under- allocation of resources in this ec

Capital gain, Capital Gain: A capital gain is a form of profit which is ear...

Capital Gain: A capital gain is a form of profit which is earned on an investment by re-selling an asset for more than it cost to buy. Assets that can be purchased for this purpose

Resource market complications, Over the course of modern American economic ...

Over the course of modern American economic history there have been market failures, various social problems, and other complexities that have resulted in certain resource markets

Calculates suspicion of government , Implicit in these analyses is the fact...

Implicit in these analyses is the fact that without government we could have neither shortage nor surplus.  In large calculates, the suspicion of government is due to it has the po

Budget Deficits and Surplus, In year one, suppose the federal government ha...

In year one, suppose the federal government has no national debt and spends $100 billion, while raising only $50 billion in taxes. The U.S. Treasury will issue $ billion of governm

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