Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 32, Problem 10E
To determine
Effect of urban sprawl on city prices.
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A fast-food company spends millions of dollars to develop and promote a new hamburger on its menu only to find that consumers won't buy it because they dont like the taste. From an economic perspective, the company should
keep the hamburger on the menu because they have spent so much money and time developing and promoting the product.
spend more money to develop a more efficient way to cook the hamburger so it cooks in a shorter time.
pull the hamburger off the menu and treat the development and promotion expenditures as a sunk cost.
keep trying to sell the hamburger so that people who developed and promote it have a job with the company.
clean water is a public benefit since it is impossible to exclude anyone from drinking it, and drinking water by one person does not affect the amount of water available for others to consume.
In this situation, market failure occurs because the private market cannot deliver clean water efficiently. This is because private enterprises would be unable to charge for clean water. After all, everyone could drink it even if they did not pay for it. As a result, private enterprises would have little need to invest in supplying safe drinking water. By monopolizing the clean water market, the government can efficiently provide it. The government can charge for clean water as a monopolist, utilizing the revenue to offset costs. Suggest a relevant government policy that would yield efficient outcome. using 30 words carefully explain the process through which the implementation of the government policy will yield to optimal outcome.
clean water is a public benefit since it is impossible to exclude anyone from drinking it, and drinking water by one person does not affect the amount of water available for others to consume.
In this situation, market failure occurs because the private market cannot deliver clean water efficiently. This is because private enterprises would be unable to charge for clean water. After all, everyone could drink it even if they did not pay for it. As a result, private enterprises would have little need to invest in supplying safe drinking water. By monopolizing the clean water market, the government can efficiently provide it. The government can charge for clean water as a monopolist, utilizing the revenue to offset costs. Suggest a relevant government policy that would yield efficient outcome. if the government implements a clean water subsidary program as a government policy. carefully explain using 30 words max for each heading, how the imposition of the chosen government policy impacts…
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