Cooler Green Inc. is developing technology to make AC systems that use less electricity. If successful, the technology will significantly reduce the amount of energy that is wasted due to product inefficiencies. If the firm sells only in response to the market price, the quantity shown in the third column of the table below is supplied. If the firm were also to receive the broader social benefits of the new technology, the willingness to supply is shown in the fourth column. Quantity Supplied Price Quantity Demanded Quantity Supplied (private) (with social benefits) $150 800 500 710 160 740 540 740 170 680 580 770 180 620 620 800 190 560 660 830 200 500 700 860 According to the table, answer the following: 1. If the firm were to receive a price based only on private benefits, what would be the equilibrium price and quantity? 2. If the firm were to receive a price based on both private and social benefits, what would be the equilibrium price and quantity?

Cooler Green Inc. is developing technology to make AC systems that use less electricity. If successful, the technology will significantly reduce the amount of energy that is wasted due to product inefficiencies. If the firm sells only in response to the market price, the quantity shown in the third column of the table below is supplied. If the firm were also to receive the broader social benefits of the new technology, the willingness to supply is shown in the fourth column. Quantity Supplied Price Quantity Demanded Quantity Supplied (private) (with social benefits) $150 800 500 710 160 740 540 740 170 680 580 770 180 620 620 800 190 560 660 830 200 500 700 860 According to the table, answer the following: 1. If the firm were to receive a price based only on private benefits, what would be the equilibrium price and quantity? 2. If the firm were to receive a price based on both private and social benefits, what would be the equilibrium price and quantity?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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