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- What Factors Influence Perfect Competition for Environmental Economic Market Structures.A firm has a division that produces chemical Y, whose average total costs are ATC = 50 + 2Q (where Q is the quantity of Y), and a marketing division that adds its own average total costs of ATC = 20 + 3Q. There is no external market price of Y. What should be the transfer price?Question: Define externalities. Discuss how the presence of externalities might affect the allocation of resources by a purely competitive industry.
- An environmental regulation results in the closing down of many firms in an industry, leaving just two or three dominant firms. How might this affect the long-run costs of the regulation?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?In a fishery the long-run harvest function (harvest volume) is H(E) = aE - bE2, with a, b representing positive constants and E is fishing effort. Total cost is TC(E) = CE, with e being the unit cost of effort. Total revenue is TR(E) = pH(E), with p being the constant price of fish.a) Find the open-access equilibrium values of effort and harvest.b) Find the fishing effort that maximizes resource rent, EvEy, and the corresponding harvest, HMEY.c) Find the fishing effort that maximizes sustainable yield (harvest), EMsy. d) Explain why higher levels of effort (E) beyond a certain point are associated withreductions in long-run total revenue (TR).Explain why it generally is not efficiency- maximizing for society to supply the level of fishing effort that maximizes the sustainable yield.
- If the market for the resource were allowed to go to equilibrium in the first generation, without any regulation, what area(s) would represent(s) the total benefits obtained by the second generation? C+D+E D+E E D B+C+D+EIn a fishery the long-run harvest function (harvest volume) isH(E) = aE - bE2, with a, b representing positive constants and E is fishing effort.Total cost is TC(E) = CE, with e being the unit cost of effort.Total revenue is TR(E) = pH(E), with p being the constant price of fish.a) Find the open-access equilibrium values of effort and harvest. b) Find the fishing effort that maximizes resource rent, EvEy, and the corresponding harvest,HMEY. c) Find the fishing effort that maximizes sustainable yield (harvest), EMsy. Answer only sub parts b and c.When governments deregulate an industry, using economic theory, explain what governments want to achieve in terms of social-well being.
- What Factors Influence Perfect Competition for Environmental Economic Market Structures. 2. Which Buyers and Sellers Influence Environmental Economic Markets. 3. Externalities in Your Current Home Country Environmental Economic Market. 4. How Governments Address the Existence of Negative Externalities in Environmental Economic Markets. 5. Profitability Associated with Environmental Policy Research.Do you believe economic principles, like competition, apply in both private and public organizations? Be prepared to defend your answer.(J) Suppose the production process of a particular good creates a negative externality such as pollution. Other things being equal, would society be better off if this good were produced by a perfectly competitive market or by a monopoly? a. Society would be better off if this good were produced by a perfectly competitive market, because a perfectly competitive market responds to consumers' desires in the long run b. Society would be better off if this good were produced by a perfectly competitive market, because a perfectly competitive market will produce the quantity where Marginal Revenue equals Marginal Cost c. Society would be better off if this good were produced by a monopoly,