Consider the graph from Question 9 (reproduced below) and the same technology and tax scenario. If the firm adopts the New technology, its total compliance costs (i.e., tax payment plus total abatement costs) in addition to the cost of adopting the new technology will be #3 A+B+C+D+E O b. A+D+C O c. A O d. A+B O e. A+D+E
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- Use the following information to answer Questions 14 – 18. Consider an industry of 2 firms with the following marginal abatement cost functions: MAC1 = 300 – 30e1 MAC2 = 500 – 20e2 [14] What is the aggregate level of emissions without regulation? [15] How much should a regulator allow each firm to emit to limit aggregate emissions to 20 tons cost-effectively? Firm 1 _____ Firm 2 ________ [16] What tax should the regulator set to achieve an aggregate emissions level of 20? [17] Calculate the total abatement cost for both firms of reaching the aggregate emissions level of 20 tons via the tax? Don’t include the tax payments. Firm 1’s Total Abatement Cost _______________ Firm 2’s Total Abatement Cost _______________ [18] Suppose you want to limit aggregate emissions to 20 tons with a competitive tradeable emissions permit system. If Firm 1 is given 5 permits and Firm 2 is given 15 permits, after trading how many permits will each firm end up with? Firm 1 _________ Firm 2 __________A vertically integrated firm has 2 divisions; upstream and downstream divisions. The upstream division produces chemical Y, whose average total cost is ATCU = 10 + 2QU, where QUis the quantity of Y. The downstream division has its own average total cost of ATC = 20 + 3Q where Q is the quantity of the firm’s final product. There is no external market. What is the transfer price (PU)? Question 55 options: PU = 10 + 2QU. PU = 10 + 4QU. PU = 20 + 3QU. PU = 20 + 6QU. None of the above.You are given the following data for your firm, which sells a patented super-absorbent cleaning towel for use in large retail complexes (called “One Wring to Rule the Mall” ©). Q P TC 0 $215 $2,700.00 10 $208 $4,062.50 20 $201 $5,180.00 30 $194 $6,157.50 40 $187 $7,100.00 50 $180 $8,112.50 60 $173 $9,300.00 70 $166 $10,767.50 80 $159 $12,620.00 90 $152 $14,962.50 100 $145 $17,900.00 Determine equations for P=f(Q), MR=f(Q), ATC=f(Q, Q2), AVC=f(Q, Q2), MC=f(Q, Q2). Recall that your marginal equations should be derivatives of your totals! Determine the profit-maximizing price and quantity. (Since MC is in terms of Q2, solving with calculus and algebra can be messy unless you know the quadratic formula. Your table should give an exact answer.) How much total profit would your firm earn if you set P and Q according to part b? Describe the competitiveness of the market by calculating the…
- Let’s assume that in California a corporation that produces electricity controls the market where its electricity is purchased and sold, then it would most probably Group of answer choices have legal protection to prevent copying its methods of production for commercial use. cut production, raise prices and realize positive economic profits. have a patent giving it exclusive legal rights to make, use, and sell for a limited time. export its product to other countries.Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 16 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 8 - E. If the government raises the emissions tax from $2 to $3, then the benefits of adopting the new technologies increase by $____. (Hint: recall that the benefits from adopting new technologies are simply the difference in total compliance costs.) THE ANSWER IS NOT 2 or 1.75 Might be 1.25 or 4.501. Suppose that the Marginal Abatement Cost function and the Marginal Damage function for an industry are given as follows: For simplicity here, we are assuming that they are linear. a. Graph the MAC and MD curves for this industry. Make sure you are marking out any and all relevant axis intercepts. MAC 100- 0.8e MD = 0.2e b. Suppose that an emission tax is imposed to achieve the efficient outcome, at what value should the government set the tax? Explain. c. e. At the efficient tax established in part b. what is the expected level of emissions? Explain. d. At the efficient tax, what is the dollar amount of the tax payment by firms to the government? Explain. What is the total abatement cost incurred due to the tax? Explain. f. What is the total cost to the firm with this emissions tax? Explain. g. Which policy is more costly to the polluting firm? An efficient standard or an efficient emissions tax? Explain. Use numbers to support your answer. Hint for Question 1: remember from basic…
- Kindly assist on this two questions. A firm is earning negative economic profit of $5,000. If its total revenue is $7,000 and it's implicit costs are $3,000, what must be it's explicit costs be? a) $8000 b) $9000 c)$10,000 d)$12,000 c) Indeterminate For question two (2) kindly see the attached image .. 2) what is the deadweigjt loss that results from this externality. a) QE-Q* b) Pc-PE c) Pc-Pp d) (Pc-Pp) * QE e) (Pc-PP) * (QE-Q*) *½The marginal benefit of being able to emit a ton of sulfur dioxide emissions for two firms are given by:MBX = 1000 – ( Ex / 2 )MBY = 600 – ( Ey / 3 ) Note that these marginal benefit figures can be interpreted as marginal cost of abating emission down to levels Ex and Ey.Government regulators want to reduce total sulfur dioxide emissions to a total of 1800 tons.a) If the government imposes the same standard of 900 tons maximum emissions on both firms what would be the total cost of abatement (calculated as the aggregated marginal benefits forgone)? b) If the government distributed 900 tradable pollution permits (one ton each) to each firm what would be the final allocation of these permits after the firms trade them?c) What would be the total cost of abatement in this latter case?Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 16 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 8 - E. If the government raises the emissions tax from $2 to $3, then the benefits of adopting the new technologies increase by $____. (Hint: recall that the benefits from adopting new technologies are simply the difference in total compliance costs.) Please round your final answer to two decimal places if necessary. Answer is NOT 2. All information is provided
- Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 16 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 8 - E. If the government raises the emissions tax from $2 to $3, then the benefits of adopting the new technologies increase by $____. (Hint: recall that the benefits from adopting new technologies are simply the difference in total compliance costs.) Please round your final answer to two decimal places if necessary. Answer is not 2It costs $1 million in R&D to develop a new diabetes treatment. The marginal cost of producing and marketing a treatment, once discovered, is $10. Suppose that Pfizer currently is selling a treatment that is covered by a valid patent, which is set to expire in one year. What is the most likely outcome of a proposed law that would allow generic drug companies to enter any market 5 years before the expiration of the patent covering it? A. More diabetics would use the treatment Pfizer invented, and drug companies would invest more in R&D for future treatments B. Fewer diabetics would use the treatment Pfizer invented, and drug companies would invest more in R&D for future treatments C. More diabetics would use the treatment Pfizer invented, and drug companies would invest less in R&D for future treatments D. Fewer diabetics would use the treatment Pfizer invented, and drug companies would invest less in R&D for future treatmentsImagine a firm’s marginal abatement cost function with existing technologies is: MAC = 12 – E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 6 – 0.5E. The adoption costs for the new technology are $6. If the government raises the tax on emissions from $2 to $4, the firm's total costs increase by $_____. HINT: Total costs include tax payments, total abatement costs, and (if relevant) adoption costs for the new technology. Select one: a. $12. b. $8. c. $10. d. $16.