Calculate the efficiency loss in an unregulated market with marginal benefits 90 – 0.25q, marginal social costs20 + 0.25q and marginal costs 20 + 0.75q.
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Calculate the efficiency loss in an unregulated market with marginal benefits 90 – 0.25q, marginal social costs20 + 0.25q and marginal costs 20 + 0.75q.
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- You are an industry analyst who specializes in an industry where the market inverse demand is P = 200 − 4Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 12Q. a. What is the socially efficient level of output? b. Given these costs and market demand, how much output would a competitive industry produce? c. Given these costs and market demand, how much output would a monopolist produce? d. Discuss actions the government might take to induce firms in this industry to produce the socially efficient level of output.In the presence of external costs, untaxed or unregulated production is said to be.......................with a price that is................. a)too high; too high b) too high; too low c) too low; too high d) too low; too lowGive an example of a good or service that should not be allocated entirely by a free, unregulated market. Explain your reasoning.
- What do each of the following have in common? public good unregulated monopoly a good with a negative externality information failure Multiple Choice marginal cost will be equal to marginal utility all are examples of market failures all of the goods are overproduced marginal cost will be equal to marginal utility and all are examples of market failuresWhat is the tragedy of the commons? Explain how this concept might apply to an unregulated industry that is a source of water pollution.The market for pens in Howards is perfectly competitive with no externalities. Market demand is given by Q=165-P. Market Supply is given by Q=P-16.What is total Surplus in this market?
- When governments deregulate an industry, using economic theory, explain what governments want to achieve in terms of social-well being.Assume a perfectly competitive market with no externalities. The demand curve is P =52 - 0.06×Qd. The supply curve is P =0.06×Qs. In equilibrium, what is total surplus?Give an example of a real-life situation that gives rise to externality. Explain clearly about the nature of external effect. Explain why the free unregulated outcome may be subject to problems and how the problem in this example has been or can be remedied. Answer should be kept within 200 words.
- Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to “Calculate,” you must show how you arrived at your final answer. Soybeans are produced and sold in a perfectly competitive market. The fertilizers used in soybean production generate a negative externality by seeping liquid contaminants into local rivers. (e) If this market were a monopoly with identical cost conditions, would the monopoly’s profit-maximizing quantity be greater than, less than, or equal to QC?Would Warby Parker be more or less financially successful if it were not so focused on social responsibility? Explain.If you build an amusement park that abuts to a national forest and this park damages the adjacent national forest is this a tragedy of the commons situation?
