Suppose that a firm producing copper is dumping mine tailings into the river. Assume that the price of the product represents both its private and social benefit to society. The firm incurs costs listed below under MCp for each additional ton of copper produced.The mine tailings, though, lower the dissolved oxygen levels in the river resulting in fewer fish. Given fewer fish, the local people downstream must fish longer hours. For each additional ton of copper produced, this added cost to the local people is represented byMCE. These costs are represented below.QP.MCp MCE1$30$10$42$30$18$63$30$25S84$30$31$10$30$45$12What will be the socially efficient level output (tons)?O a. 1O b.2OC 3O d. 4

Answered: What will be the socially efficient…

Business

Economics

What will be the socially efficient level output (tons)? a..

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 5SQ: The perfectly competitive profit-maximizing firm in Exhibit 6 creates water and air pollution as a...

See similar textbooks

Related questions

Q: The “demand” (MB) curve for pollution abatement would be given by the pollution damages that could…

A: a. Here, a firm's cost and benefit of pollution are graphed. The MC curve is the marginal cost curve…

Q: PS=QS. Anchovy pizza smells bad. The bad smell imposes an external cost on anyone near the pizza…

A: The bad smell imposes an external cost to third party who is not directly involved in the…

Q: theory of external economies a

A: External economies of scale occur when an entire industry grows faster & firms get benefitted…

Q: If negative externalities exist in the production of a product, it causes causes_ of the product

A: Negative Externality : Negative Externality exists when the production or consumption of a good or…

Q: The market equilibrium quantity is tons of steel, but the socially optimal quantity of steel…

A: The social cost curve will be $105 higher for each price above the Private cost curve.

Q: Suppose that demand for anchovy pizza is given by PD = 50 – QD, and the supply of anchovy pizza is…

A: Since you have given multiple questions, we will solve the first one for you. If you want any…

Q: Assume that the market for tradable emissions permits by power plants has been operating efficiently…

Q: what are the corrective taxes? why do economists prefer them to regulate as a way to protect the…

A: Corrective tax is the tax which is enacted for reducing the negative externality. The production of…

Q: Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a…

A: The markets in every economy are considered to be of utmost importance for the allocation, and…

Q: Discuss the economic externalities that can result from deforestation

A: Externalities occur when producing or consuming goods can cause an impact on third parties not…

Q: In the context of energy supply, describe how the existence of a negative production externality may…

A: When the production of goods and services causes harmful effect on the third party, individual or…

Q: Typically this kind of economic activity results in environmental harm through production and…

A: "Decoupling" means to separate one thing from another. Hence, when a country such as Econ Land…

Q: h) What is the socially optimal level of production of leather by All-Leather? i) Draw a diagram…

A: The Marginal Social Cost (MSC) is the summation of the marginal private costs of a firm and the…

Q: Which of the following is a positive externality?

A: Positive externality is the externality which impacts the society positively. It occurs when the…

Q: Which of the following demonstrates a market failure? Select all that apply. O The negative…

A: In a market, market failure refers to the situation when market is not operated at the equilibrium…

Q: What is the socially optimal output

A: The socially optimal output will occur when we set marginal benefit equals marginal cost and we also…

Q: By market failure, the author means A. a situation that occurs when one person's consumption of…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Consider the following diagram which illustrates MPB, MSB and MPC of education. In this diagram, the…

A: Consider the following diagram which illustrates MPB, MSB and MPC of education. In this diagram, the…

Q: The Government of Yokuku considers applying one of the following policies: a tax or a standard, in…

A: The total social cost under the tax policy will be A+B+C. Under the tax policy, the social total…

Q: Which areas on the graph represent the net benefit to society at Anatole' original level of gas use?…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: ose that demand for anchovy pizza is given by PD=50−QD, and the supply of anchovy pizza is given by…

A: Bad smell of a pizza generates negative externality for people who are are not directly involved in…

Q: Which of the following is an example of Ecological value?

A: Ecological value is related to nature and environment.

Q: Is zero pollution an optimal goal?

A: An externality is present whenever some economic agents' welfare (utility or profit) is directly…

Q: chemical factory emits waste products into a river. The waste products affect a fishery downstream.…

A: Marginal damage (MD) is the damage caused to the fishery by each additional emission done by the…

Q: When pollution (a negative externality) is created by firms, which of the following is NOT a valid…

A: Negative externalities arise when a detrimental impact on a third party is triggered by the use or…

Q: A government study has concluded that the marginal benefits from controlling cow-induced methane…

A: Hey, Thank you for the question. According to our policy, we can only answer up to 3 subparts per…

Q: Is zero pollution an optimal goal? Why or why not?

A: An optimal goal is one that provides a positive outcome or a goal is said to be optimal when the…

Q: A country is currently creating40 million tons of toxic waste per year. The table below shows the…

A: All forms of unwanted materials example television or phone disposed contain harmful chemicals and…

Q: The social cost of carbon is measured as the welfare gain associated with the total tons of carbon…

A: Social cost: It means the total cost to society.

Q: What are commons and public goods? Provide any two examples of such goods.

A: In economics, common goods, sometimes known as common resources, are goods that are non-excludable…

Q: The market equilibrium quantity is tons of steel, but the socially optimal quantity of steel…

A: Market Equilibrium quantity occurs when Demand (Private Value) is equal to the Supply (Private…

Q: Please explain the theory of external economies

A: Theory of external economies of scale Economies of scale takes place when average cost starts to…

Q: How much is produced by the firms in the competitive What is the socially best level of production?

A: MCp = dCp/dQ = 300 + 20Q In competitive equilibrium, p = MCp. 1500 - 10Q = 300 + 20Q 30Q = 1200 Q =…

Q: Do you think that there would be external effects associated with Water from a uranium mine leaking…

A: In the Producer theory, externality is considered to be the benefit (gain) or cost (loss) that…

Q: Define social cost.

A: The private cost is the cost which is incurred by the producer to purchase the factor of production.…

Q: What is an externality? Provide two examples each of positive and negative externalities

A: Externality refers to the cost which is incurred or benefit which is received by third party. Third…

Q: If the production of oranges reduces global warming, then the equilibrium quantity of oranges will…

A: Equilibrium quantity refers to the quantity that exhibits the level where demand and supply are…

Q: The graph shows the marginal private benefit from a dentistry degree and the marginal cost of…

A: externality is defined as the consumption or production done by any party, which effects the third…

Q: Are socially efficient level of emission and market efficiency is equal? Explain with help of…

A: Market outcomes are characterized by optimizing the level of output taking into consideration the…

Q: Briefly discuss the advantage of quota vs. tax to limit externalities from consuming sugary…

A: A basic method for nations to produce public revenues that enable them to support investments in…

Q: When people wear masks during a pandemic it provides an external benefit to others. Economists would…

A: During a Pandemic, wearing mask generates external benefits because it reduces the chance of…

Q: Fertilizer supply is explained by the following equation: ?? = 3,000? where ?? is the supply per…

A: Perfect competition refers to the situation where there are large number of prouder and consumers…

Q: Draw a demand curve and describe the external factors thatdetermine demand.

A: Demand curve shows the negative price and quantity relationship for a commodity. As price increases…

Q: Education is frequently cited as a source of external benefits. How?

A: External benefits : An external benefit is the benefit gained by an individual or firm as a result…

Q: A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals…

A: Since you have posted a question with multiple subparts, we will solve the first three subparts for…

Q: What is the “tragedy of the commons”? What are two ways to avoid it?

A: The markets refer to the place where the buyers, and sellers interact. In the markets, the buyers…

Question

Suppose that a firm producing copper is dumping mine tailings into the river. Assume that the price of the product represents both its private and social benefit to society. The firm incurs costs listed below under MCp for each additional ton of copper produced.
The mine tailings, though, lower the dissolved oxygen levels in the river resulting in fewer fish. Given fewer fish, the local people downstream must fish longer hours. For each additional ton of copper produced, this added cost to the local people is represented by
MCE. These costs are represented below.
Q
P.
MCp MCE
1
$30
$10
$4
2
$30
$18
$6
3
$30
$25
S8
4
$30
$31
$10
$30
$45
$12
What will be the socially efficient level output (tons)?
O a. 1
O b.2
OC 3
O d. 4

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 - answer

VIEW

Step 2 - explanation

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Economists sometimes shock noneconomists by stating that they do not favor the complete elimination of pollution. Explain the rationale for this position.
Is zero pollution possible under a marketable permits system? Why or why not?
By selling x tons of the first commodity the firm gets a price per ton given by Px=96-4x By selling y tons of the other commodity the price per ton is given by Py=84-2y The total cost of producing and selling x tons of the first commodity and y tons of the second is given by C(x,y)=2x2+2xy+y2 Suppose that the firm’s production activity causes so much pollution that the authorities limit its output to 11 tons in total. That is x + y = 11. What is the optimal amount of y?
Consider the market for trees in a public park. These trees are a public good that give benefits to multiple groups of people, as described below. Each Marginal Willingness to Pay curve represents the aggregation of all the individuals in that group, and those groups make decisions collectively. Additionally, the cost of planting trees is given. Consider Q to be the number of trees in the park. Note that no one is ever worse off from additional trees. Arborists: MWTP = 2000 – 5Q Total WTP = 2000Q - 2.5Q2 Environmentalists: MWTP = 1500 – 10Q Total WTP = 1500Q – 5Q2 Casual Park Visitors: MWTP = 800 – 10Q Total WTP = 800Q – 5Q2 Park Haters: MWTP = 500 – 50Q Total WTP = 500Q – 25Q2 MC = 1400 Total Cost = 1400Q (a) If the government does not intervene into the market, how many trees will be planted? (b) What is the socially…
A chemical company can produce Q units of a chemical H, with marginal costs of MC = 9 + Q, and can distribute the chemical at marketing marginal costs of MC = 1. The demand for H is given by P = 30 - 1.5Q. If an external market exists where H can be bought or sold without marketing expenses for $13, how much H should the firm produce? 4 units 10 units 7 units 5 units 0 units
Consider a competitive industry with production valued according to a MB = 200 - Q and production entails a private marginal cost MC = 50 + 2Q but also an external cost MCE = 30 + 2Q associated to air pollution resulting from the production process. Find the socially efficient quantity of output Q. What quantity Q0 will be produced by the market? Is this quantity efficient? If not, obtain the deadweight loss.