INTERNATIONAL EDITION---Essentials of Economics, 10th edition
10th Edition
ISBN: 9781259696008
Author: Bradley R. Schiller
Publisher: MCG
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Chapter 6, Problem 2QFD
To determine
To analyze: The decisions taken by catfish farmers from 2002 to 2008.
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The figure below shows the demand curve for a U.S. farmer for irrigating his land. It costs $100 per acre to irrigate the land.
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The inverse demand for leather is given by P = 50-0.5Q. The industry supply of leather is determined by its marginal cost: MC = 0.4Q. Unfortunately, the production of leather causes noxious chemical residue to leach into groundwater supplies. The external marginal cost caused by these residues grows with the amount of output, and is measured as EMC = 0.05Q.
1A. How many leather is produced in the free market if the externality is not corrected.
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Chapter 6 Solutions
INTERNATIONAL EDITION---Essentials of Economics, 10th edition
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