Question: Define externalities. Discuss how the presence of externalities might affect the allocation of resources by a purely competitive industry.
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Question: Define externalities. Discuss how the presence of externalities might affect the allocation of resources by a purely competitive industry.
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- Can externalities affect the allocation of resources by a perfectly competitive industry?Using demand and supply diagram, describe and discuss positive externality in production of a product/service. In your discussion, explain why the existence of a positive externality leads to inefficiency2. Define externalities. Discuss how the presence of externalities might affect the allocation of resources by a purely competitive industry.
- Explain the "Externalities theory" in general Explain the concept of "social marginal cost" Give one clear example of production externality and its influence on the "social marginal cost".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.12. (Externalities) Suppose there is an external cost, or negative externality, associated with production of a certain good. What's wrong with letting the market determine how much of this good will be produced? Answer this question with the help of at least one example of negative externality. The owner of a small pizzeria is deciding whether to increase the radius of delivery area by one mile. What considerations must be taken into account if such a decision is to increase profitability.
- 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?Use the following Graphical to answer questions. a. Refer to the above diagram in which S is the market supply curve and S1 is a supply curve comprising all costs of production, including external costs. Assume that the number of people affected by these external costs is large. Without government interference, what will this market result in? b. Refer to the above diagram in which S is the market supply curve and S1 is a supply curve comprising all costs of production, including external costs. Assume that the number of people affected by these external costs is large. If the government wishes to establish an optimal allocation of resources in this market, what should it? a. Description Where there is asymmetric information between buyers and sellers! b. In which buyers will opt out of markets? Define the concept of a negative externality and explain the nature of the negative externality in the fishing markets i.e. describe how the self-interested actions of a fishing company might adversely affect third parties without their consent.
- 46.In long-run equilibrium, the marginal social cost exceeds the marginal private cost, but the marginal social benefit is equal to the marginal private benefit. This describes which of the following markets? Oligopoly with no externalities Monopoly with perfect information Perfect competition with a positive externality Perfect competition with a negative externality Perfect competition with asymmetric informationGive an example of a positive and negative externality. Explain why market outcomes are inefficient in the presence of these externalities.[Topic : Market allocation and welfare; lecture: externality need part d and e