(a) Does an externality exist? If so, is it positive/negative (or both) (b) Use Coase’s framework to identify the cause of the externality (c) If an externality exists, determine whether the Coase theorem applies (i.e. is it possible/feasible to assign property rights and solve the problem?). Provide reasoning. (d) If an externality exists and the Coase theorem does not apply, discuss a government/institutional solution that can mitigate the problem of externality. Provide reasoning.
Q: THIS IS A MULTIPLE ANSWER QUESTION. IT MAY HAVE MORE THAN ONE CORRECT ANSWER. Imagine a competitive…
A: The firm maximizes profit by producing at P=MC and the firm makes zero economic profit at…
Q: Three firms are producing a good and are competing in prices: consumers buy from the firm that has…
A: The question is based on the Bertrand model of Oligopoly.
Q: Which of the following conditions does not need to occur for a market to achieve allocative…
A: Allocative efficiency:- Allocational, or allocative, efficiency is a characteristic of a…
Q: Characteristics of competitive markets The model of competitive markets relies on these three core…
A: Meaning of Perfect Competitive Market: The term perfect competitive market refers to the situation…
Q: A competitive equilibrium will lead to economic efficiency that O may lead to inequity O both…
A: In general, when there is an excess supply of products or services, prices fall, resulting in…
Q: Which of the following are NOT characteristics of a competitive market? * a)Buyers and…
A: Market structures are of different types. Each market structure has its own characteristics and…
Q: The model of competitive markets relies on the following four core assumptions: 1. There must be…
A: In a small town there are two providers of broadband.....- No, only a few sellers In a major…
Q: Recently, the Obama administration proposed a $1.00 per unit (pack) excise tax on cigarettes (which…
A: PLEASE NOTE AS PER THE BARTLEY POLICY I AM SOLVINF FIRST QUESTION. PLEASE POST SECOND QUESTION…
Q: The competitive market equilibrium is allocatively efficient because a) At the equilibrium…
A: Allocative effectiveness truly intends that among the points on the creation plausibility outskirts,…
Q: The market mechanism that yields an efficient outcome tries on all of the following actions EXCEPT…
A: The market mechanism leads to an efficient outcome when the producers and consumers maximize their…
Q: Find supporting evidence that competition makes markets more efficient in this case.
A: Competition arises when the number of sellers in the market increase, as more firms join an industry…
Q: Which of the following characterizes a competitive equilibrium? Markets are rationed. Economic…
A: Competitive equilibrium: Competitive equilibrium is an economic condition where the producers having…
Q: Fill in the blanks When competitive markets are freely allowed to come to equilibrium,. achieved. is
A: Meaning of Market: The term market refers to the situation under which the producers or the…
Q: Discuss how the presence of middlemen affects the operation of competitive markets.
A: In a competitive market, neither a single customer nor a single manufacturer can have a significant…
Q: Suppose we have a perfectly competitive market that is efficient. Which of the following, when…
A: Perfect competition is theoretically a monopoly that allows a company to charge any price, as only…
Q: Identify whether the market supply curve will shift right or left or will stay the same for the…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: The First Theorem of Welfare Economics (that a competitive equilibrium is Pareto efficient) may not…
A: The first theorem of welfare economics is otherwise known as the fundamental theorem and also known…
Q: Suppose perfect competition prevails in the market for hotel rooms. The current market equilibrium…
A: Perfect competition refers to the market structure featuring more number of sellers and buyers in…
Q: Allocative efficiency is an economic concept regarding efficiency at the social or societal level.…
A: Here answer is “Has no motivation to operate at an output level where P=MC, once a barrier is in…
Q: Define a perfectly competitive market. A. Market that makes it possible for firms or businesses to…
A: Perfectly competitive market: - it is a market condition where there are many buyers and many…
Q: Identify whether or not each of the following scenarios describes a competitive market, along with…
A: * ANSWER :- * In a small town......... No, not many sellers ( There few firms dominating the…
Q: Considering we are at equilibirum in a perfectly competitive firm with no externalities Do sellers…
A: Negative externality refers to the situation where the third party who does not involve in the…
Q: Determine the type of market failure represented by the scenario below: Charlie loves watching…
A: Market failure: It is the situation depicts the inefficient distribution of goods and services in a…
Q: When a competitive market is in equilibrium, the buyers are those with the __________ willingness to…
A: Answer: Correct option: option B Explanation: Willingness to pay refers to the maximum price a buyer…
Q: At the competitive equilibrium quantity supplied equals quantity demanded in all markets. Equity…
A: For the given question, it need to be identified whether the given statements are true or false.
Q: Suppose that a chemical manufacturing plant is releasing nitrogen oxides into the air, and these…
A: In economics, one of the major causes of market failure is the presence of externalities. An…
Q: The model of competitive markets relies on these three core assumptions: 1. There must be many…
A: The market structure can be divided into four based on the degree of competition in the market and…
Q: The model of competitive markets relies on these three core assumptions: 1. There must be many…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Identify whether or not each of the following scenarios describes a competitive market, along with…
A: In any market such as cereal and oil market, the interplay between market demand and market supply…
Q: Suppose that pig farming in a region is a perfectly compet- itive industry. However, one negative…
A: In the above question, it is given that : Suppose that pig farming in a region is a perfectly…
Q: Assume the market for organically-grown produce is perfectly competitive. All else being equal, as…
A: Perfectly competitive markets refer to those where several sellers compete to sell identical…
Q: Assume that candle wax is traded in a perfectly competitive market in which the demand curve…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the…
A: We are going to perform equilibrium analysis to answer this question
Q: Supposed that solar panels are produced in a perfectly competitive industry, which of the following…
A: Meaning of Market: The term market refers to the situation under which the producers or the…
Q: 1. The cost function for any potential firm in a manufacturing industry is C(y) = 2 + 8y + 2y? (if a…
A: In long run a perfectly competitive firm produces at following point in equilibrium. P = MC = AC…
Q: If the supply and demand functions are specified as follows : a. P = 10 - 2Q and P = 2/3Q + 1 b. Q =…
A: Demand: P = 10 - 2Q Supply: P = 2/3Q + 1
Q: Suppose the total cost of producing widgets can be described by Y=10X²+50X+100 where Y is the total…
A: Given the total cost of production is Y and the number of widgets is X, Y= 10X2+5X+100
Q: Characteristics of competitive markets The model of competitive markets relies on these three…
A: In a perfectly competitive market there are large number of buyers and sellers selling identical…
Q: Identify whether or not each of the following scenarios describes a competitive market, along with…
A: In case of Perfectly Competitive Market, there are large number of buyers and sellers. The product…
Q: Use the following to answer questions (1) - (14): Suppose the local market for flat glass,…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Assume that banana squash is traded in a perfectly competitive market in which the demand curve…
A: A perfectly competitive market is the market in which there are many sellers selling homogeneous…
Q: Use the following to answer questions (1) - (14): Suppose the local market for flat glass,…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Homework (Ch 14) 1. There must be many buyers and sellers-a few players can't dominate the market.…
A: In a competitive market, there are various sellers selling identical goods. Firms are price takers…
Q: Question 3 Suppose that the cost function of a firm is C(q)=4q. Suppose that this is the only firm…
A: As the firm is a single seller in the industry it will maximize its profit at MR=MC
Q: What determines the extent of competition in a market? How much the price decreases as more firms…
A: In a market, the extent of competition is determined by the entry and exit.
Answer the following for the given example (for a
(a) Does an externality exist? If so, is it positive/negative (or both)
(b) Use Coase’s framework to identify the cause of the externality
(c) If an externality exists, determine whether the Coase theorem applies (i.e. is it possible/feasible to assign property rights and solve the problem?). Provide reasoning.
(d) If an externality exists and the Coase theorem does not apply, discuss a government/institutional solution that can mitigate the problem of externality. Provide reasoning.
Step by step
Solved in 2 steps
- Using diagrams and calculations, compare the welfare outcomes of the following markets to that of a perfectly competitive market. Assume the inverse market demand for the product is P = 1000 – 2Q and that the marginal cost of production is MC = Q. Remember that a perfectly competitive firm will operate at an allocatively efficient equilibrium. You may only use one diagram per answer. First degree price discriminator compared to perfect competition please show what the diagram would look like as I am able to do the calculations but the diagram is confusing me to some extentSuppose that a chemical manufacturing plant is releasing nitrogen oxides into the air, and these emissions are associated with health and ecological damages. Economists have estimated the following marginal costs and benefits for the chemical market, where Q is monthly output in thousands of pounds and P is price per pound. MSB = 50 – 0.4Q MSC = 2 + 0.4Q MEB = 0 MEC = 0.2Q. Find the competitive equilibrium, QC and PC.The model of competitive markets relies on these three core assumptions: 1. There must be many buyers and sellers—a few players can't dominate the market. 2. Firms must produce an identical product—buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry. The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry. Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.
- The model of competitive markets relies on these three core assumptions: 1. There must be many buyers and sellers—a few players can't dominate the market. 2. Firms must produce an identical product—buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry. The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry. Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not. Scenario Competitive? Two taxi companies serve most of the market in a big city. Consumers don't care which taxi company they take—if they decide it's worth taking a taxi, they flag down the nearest one. Dozens of companies…The model of competitive markets relies on these three core assumptions: 1. There must be many buyers and sellers—a few players can't dominate the market. 2. Firms must produce an identical product—buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry. The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry. Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not. Scenario Competitive? There are hundreds of colleges that serve millions of students each year. The colleges vary by location, size, and educational quality, which enables students with diverse preferences to find schools that match…The model of competitive markets relies on these three core assumptions: 1. There must be many buyers and sellers—a few players can't dominate the market. 2. Firms must produce an identical product—buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry. The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry. Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not. Scenario Competitive? A few major airlines account for the vast majority of air travel. Consumers view all airlines as providing basically the same service and will shop around for the lowest price. There are hundreds of…
- Take this hypothetical situation: Suppose that the supply side of the market for for electric energy is comprised of two sellers: Seller 1 and Seller 2. Let P be the price of one unit of electric energy, and Q be the quantity of electric energy. Seller 1 owns a hydropower factory with a constant marginal cost of $3 and can produce a maximum of 10 units of electric energy. In addition, the hydropower plant has a requirement of a minimum of 3 units of electric energy. Seller 2 owns a solar factory to produce electric energy. This factory has a constant marginal cost of $5 and can produce a maximum of 5 units of electric energy. With this given information, please sketch the market supply by aggregating the two individual supplies. Please label the graph clearly for slopes, kinks, intercepts, etc.Take this hypothetical situation: Suppose that the supply side of the market for for electric energy is comprised of two sellers: Seller 1 and Seller 2. Let P be the price of one unit of electric energy, and Q be the quantity of electric energy. Seller 1 owns a hydropower factory with a constant marginal cost of $3 and can produce a maximum of 10 units of electric energy. In addition, the hydropower plant has a requirement of a minimum of 3 units of electric energy. Seller 2 owns a solar factory to produce electric energy. This factory has a constant marginal cost of $5 and can produce a maximum of 5 units of electric energy. A) With this given information, please sketch the market supply by aggregating the two individual supplies. Please label the graph clearly for slopes, kinks, intercepts, etc. B) Suppose that the price of geothermal increases. On the graph drawn in part A, show precisely how the supply curve changes. C) Suppose that the price of geothermal increases. In a market…In a competitive market for toilet paper, the highest price consumers are willing to pay is $12 per pack and the lowest price producers are willing to accept is $7 per pack. The market is in equilibrium where the price is $8 per pack, at which 10 million packs are sold. Assume that both demand and supply curves are straight lines. 1. The market above is efficient when the quantity of toilet paper traded is _____ million packs.
- Dear tutor, please solve these True/False Questions. Thank You! At the competitive equilibrium quantity supplied equals quantity demanded in all markets. Equity and efficiency can be achieved simultaneously through competition.Characteristics of competitive markets The model of competitive markets relies on these three core assumptions: 1. There must be many buyers and sellers—a few players can't dominate the market. 2. Firms must produce an identical product—buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry. The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry.Characteristics of competitive markets The model of competitive markets relies on these three core assumptions: 1. There must be many buyers and sellers—a few players can't dominate the market. 2. Firms must produce an identical product—buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry. The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry. Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not. Scenario Competitive? There are hundreds of colleges that serve millions of students each year. The colleges vary by location, size, and educational quality, which enables students with diverse…