2) Use the figure below to answer the following questions. Price and cost (dollars per tonne of paper) MSC 15 MC 14 13 12 11 D = MSB 40 50 60 70 Quantity of paper (tonnes) Figure 1 a) Refer to Figure 1 What is the unregulated equilibrium in the paper market? b) Refer to Figure 1 What is the marginal external cost in this market? c) Refer to Figure 1 What is needed to achieve the efficient output in the market? 30

2) Use the figure below to answer the following questions. Price and cost (dollars per tonne of paper) MSC 15 MC 14 13 12 11 D = MSB 40 50 60 70 Quantity of paper (tonnes) Figure 1 a) Refer to Figure 1 What is the unregulated equilibrium in the paper market? b) Refer to Figure 1 What is the marginal external cost in this market? c) Refer to Figure 1 What is needed to achieve the efficient output in the market? 30

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 2.5P

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Similar questions

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Is zero pollution possible under a marketable permits system? Why or why not?
Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external [not social] cost?
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