show i. on the graph and explain.  sd1 is long run domestic supply curve sd2 dometic supply curve Pw1 observed world price Pw2 includes vulnerability premium  Pw3 adds in the per unit climate change damages

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter13: Positive Externalities And Public Goods
Section: Chapter Questions
Problem 9RQ: In what ways (it) company investments in research and development create positive externalities?
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show i. on the graph and explain. 

sd1 is long run domestic supply curve

sd2 dometic supply curve

Pw1 observed world price

Pw2 includes vulnerability premium 

Pw3 adds in the per unit climate change damages

 

i. Ignoring externalities and national security risk, the abundance of low-priced
international oil keeps a country from switching to renewables even after depleting the
domestic supply of oil (either completely or to a point where MC is too large). You'll
need to show the MC of a renewable that the country would otherwise switch to if not
for cheap international oil (easiest to use constant MC).
Transcribed Image Text:i. Ignoring externalities and national security risk, the abundance of low-priced international oil keeps a country from switching to renewables even after depleting the domestic supply of oil (either completely or to a point where MC is too large). You'll need to show the MC of a renewable that the country would otherwise switch to if not for cheap international oil (easiest to use constant MC).
$/Unit
Domestic Demand
S d2
d1
w3
Pw2
P,
w1
Quantity
А В
Figure 7.2 The National Security Problem
Transcribed Image Text:$/Unit Domestic Demand S d2 d1 w3 Pw2 P, w1 Quantity А В Figure 7.2 The National Security Problem
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