solve for the SMC, the efficient level of output and the Pigouvian tax the government would need to impose to correct for this market failure. (may not solve for whole numbers) PMC 105+10Q PMB 150-5Q MD 2Q
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Using the information below, solve for the SMC, the efficient level of output and the Pigouvian tax the government would need to impose to correct for this market failure. (may not solve for whole numbers)
PMC |
105+10Q |
PMB |
150-5Q |
MD |
2Q |
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- The figure below shows a single firm's marginal abatement cost when facing a per-unit emissions tax of t. Use the figure to answer the following questions: a. What area(s) represent the total abatement cost (TAC) of the firm under the tax b. What area(s) represent the total amount in taxes paid by the firm $ t a b ان 6 e1 e2 emissionswarten population manghe ecosystem's Carrying capacity? 6. We have the following data for Demand Price and Costs for our product. Quantity Demand Price Costs 300 100 $21.63 $35.35 $5040.00 $2347.67 500 $17.25 $7481.67 1000 $12.70 $12469.67 1500 $10.26 $16196.00 We have reason to believe that the Demand Price is a power (exponential) function of some kind. Our Cost function is close to linear, but we expect, from some market analysis, that it is in fact quadratic. Approximate this data with a Demand Price function and a Cost function. Explain how confident you are; that is, how much error do you think is reasonable in this type of scenario? 区Imagine a firm with a marginal abatement cost (MAC) function equal to: MAC = 32 - 4E. The government offers a $8 per-unit subsidy for abatement. In principle, the firm could ignore the subsidy and continue to emit as many emissions as it was in the absence of government intervention, but there is money to be made from cutting back its emissions. Compared to ignoring the subsidy, how much money could a cost-minimizing firm save or make by cutting back its emissions? (Hint: remember that firms trade off the benefits of the subsidy with the costs of abatement when deciding how much to abate) Answer:
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- Consider an industry with two firms that emit a uniformly mixed air pollutant (e.g., carbon dioxide). The marginal abatement cost functions for Firm 1 and Firm 2 are: MAC1 = 100 - e1 MAC2 = 100 - 4e2 Aggregate emissions for the industry are denoted as E = e1 + e2. [1] In an unregulated environment how many units of emissions does each firm emit? Firm 1’s unregulated level of emissions ____________ Firm 2’s unregulated level of emissions ____________ Total unregulated level of emissions ______________Q4. (a) If you are a firm owner who is operating in the perfect competitive market, you areproducing socially efficient outcome. Does it imply that your profits are zero? If you become amonopolist then why do you deviate from the socially efficient outcome? b) In Delhi, as the winter season is approaching, how will it affect the demand function and themarket equilibrium of sweater market? Now after that if the price of wool increases how will themarket equilibrium be affected?Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 8 - E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 4 - 0.5E. Moreover, assume that the adoption costs for the new technologies are $3. If the government raises the tax on emissions from $1 to $3, then the firm's total costs increase by $__. (Hint: total costs are different from total compliance costs. Total compliance costs are the sum of TAC and tax payment, while total costs are the sum of total compliance costs and adoption costs (remember that adoption costs are only incurred if the firm actually decides to adopt the new technology).) Please round your final ansswer to two decimal places if necessary. Answer: