There are markets that are legal and can potentially achieve efficiency by providing a maximum total...

There are markets that are legal and can potentially achieve efficiency by providing a maximum total surplus to the society. But even in those markets, the government usually intervenes by taxing or other forms of regulations. Pick only one such market and explain the effect of the existing government interventions on the efficiency of the market.

Expert Solution

There are government regulations in rental accommodations in several cities where a rent ceiling is often imposed in the name of making such rental housing affordable. Below is one such example where market price P1 ensures that market clears and total surplus is maximized. However with rent control in place at P2 there is a shortage of rental housing units and a resultant decline in total surplus.

Another example is from a market for cigarettes where a sin tax is often imposed in order to generate revenues. The market however fails to maximize total surplus and there is a deadweight loss

Rahul Sunny answered 11 months ago

2. Of the 4 markets discussed, which market structure can achieve allocative and productive efficiency in...

2. Of the 4 markets discussed, which market structure can achieve allocative and productive efficiency in the long run 3. Which market structure can have both homogeneous and differentiated products 4. Describe the characteristics of a pure monopoly 5. What are the benefits of monopolistic competition? 6. Please explain how shut-down rule is applied. 7. Discuss the major barriers to entry into an industry

Which one of the following is the maximum growth rate that a firm can achieve with...

Which one of the following is the maximum growth rate that a firm can achieve with internal and debt financing while maintaining the same debt to equity ratio? Group of answer choices DuPont rate Internal growth rate External growth rate Sustainable growth rate

“Price ceiling is the maximum legal price that can be charged in a market ”. Explain...

“Price ceiling is the maximum legal price that can be charged in a market ”. Explain why a “price-ceiling policy” can reduce social welfare? Explain the implications the business?

Design a steam power cycle that can achieve a cycle thermal efficiency of at least 40%...

Design a steam power cycle that can achieve a cycle thermal efficiency of at least 40% under the conditions that all turbines have isentropic efficiencies of 80% and all pumps have isentropic efficiencies of 65%. Prepare an engineering report describing your design. Your design report must include, but is not limited to, the following: 1. Discussion of various cycles attempted to meet the goal as well as the positive and negative aspects of your design. 2. System figures and T-s...

"Consumers, producers, and the efficiency of Markets

Companies can achieve economies of scale by expanding into international markets because of production costs increase....

Companies can achieve economies of scale by expanding into international markets because of production costs increase. true or false

Define productivity efficiency and allocative efficiency. What conditions must be met in order to achieve them?

How efficiency and fairness can be achieved int he US markets? I want the answer in...

How efficiency and fairness can be achieved int he US markets? I want the answer in four paragaph

1. Is it acceptable for police officers to use potentially unethical, but legal, tactics when conducting...

1. Is it acceptable for police officers to use potentially unethical, but legal, tactics when conducting an investigation? (100 Words) 2. Many claim that the police have become more "militarized" in the post-September 11th Era? Do you agree? Why or why not? (100 Words)

The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially...

The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially damaging issues to individuals and careers. In this assignment, you will consider the current federal and state legal issues discussed in the last two modules and their influence on psychology ethics. A detailed explanation of the issue. A discussion of how the issue influences psychology ethics from an objective (scholarly) perspective. A discussion of how the issue influences psychology ethics from a subjective (personal)...

Question