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- Suppose a commodity tax is legally placed on paper manufacturers. How the tax is split between the consumers and producers depends on Group of answer choices the excludability of paper. who the law says must pay the tax. the elasticities of supply and demand. the politicians who drafted the tax. PreviousNextAssume that Gas & Minerals is the only copper mining firm in Chile. The national demand for copper in thousands of tonnes per month is: q^d(p) = 15 - pThe total costs in millions of dollars are: c(q) = 5q(a) What would be the profit-maximising level of production for this firm? Determine the monopoly price and quantify the profits. Graph the demand, marginal revenue and marginal cost, identifying their values along with determining the social loss generated and identifying it in the graph above. Assume now that due to a bad internal restructuring, the operations manager was fired and a professional with little mining experience was hired. The new manager does not know environmental protocol and mining waste (tailings) has gotten out of control and has been dumped into a river. This generated a negative externality on copper production. The estimated damage is US$5 million per 1,000 tonnes.(b) Obtain the social marginal cost of this mining activity.(c) What level of production will…A company with C = 100q+2q^2 produces social damages of D = 150q + 0.5q^2. Demand is P = 1000 - Q. a. Compute and compare output q under the non-cooperative (private) solution and cooperative (optimal) solution. b.Calculate and illustrate the efficiency loss. Find CS = Benefits - Expenditure and PS = Revenue - Cost C. Show how a per unit tax can be used to give a cooperative solution.
- As the manager of a monopoly, you face potential government regulation. Your inverse demand is P=40-2Q and your costs are C (Q) =8Q. Determine the socially efficient price and output.What do you think the impact is on dairy farmers, consumers, and taxpayers as a result of the margin protection program for dairy(MPP-dairy)?Calculate the efficiency loss in an unregulated market with marginal benefits 90 – 0.25q, marginal social costs20 + 0.25q and marginal costs 20 + 0.75q.
- Explain natural monopoly in case of public production of private goods.Global warming is mainly caused by Greenhouse gas (GHG) (i.e., CO2) emission. Aiming to be carbon neutral by 2060, China starts penalizing the polluting firms by introducing a specific tax to those firms. (Source: https://www.nature.com/articles/d41586-020-02927-9)Suppose you are the owner of a profit-maximizing firm in China that produces goods with carbon emission. The specific tax (with tax rate t) is imposed in proportion to the quantity of your firm’s output (q). The market of your firm’s product is assumed to be perfectly competitive. Assume there is no fixed cost: use a fully labelled diagram to show the effect of the tax on the cost curves, and briefly discuss the movement of the curves. (10 marks) Suppose China government decides to raise the tax rate. Discuss the impact of the rise on your firm's output level with economic models wherever necessary. (20 marks)When the government makes a firm the exclusive legal provider of a good or service, it grants the firm A. a public franchise. B. a copyright. C. a quota. D. a network externality.