cost of coal Tumps is given by the following: MC=10+0.25Q. In addition, there is an external cost of coal lumps (E) to residents who live near the coal mine where E=0.5Q. If the market for coal lumps is competitive, the deadweight loss to society is equal to:

cost of coal Tumps is given by the following: MC=10+0.25Q. In addition, there is an external cost of coal lumps (E) to residents who live near the coal mine where E=0.5Q. If the market for coal lumps is competitive, the deadweight loss to society is equal to:

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter12: Environmental Protection And Negative Externalities

Section: Chapter Questions

Problem 40P: Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in...

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Question

The demand for coal lumps is given by the
following: p=180-0.25*Q. The private marginal
cost of coal lumps is given by the following:
MC=10+0.25Q. In addition, there is an external
cost of coal lumps (E) to residents who live near
the coal mine where E=0.5Q. If the market for
coal lumps is competitive, the deadweight loss
to society is equal to:
a. 0.
b. 7225.
c. 14450.
d. 28900.
e. None of the above.

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