Question

In: Economics

A chemical factory and fishery are located on the same lake. Suppose the chemical factory has...

A chemical factory and fishery are located on the same lake. Suppose the chemical factory has the property right to use the lake, and that its pollution is reducing the number of fish in the lake which directly harms the fishery. The marginal damage function is given by MD = 5E and the marginal abatement function is given by MAC = 1000-5E. Emissions are in units per month and costs are in dollars per unit of emission. How much would the fishery need to offer the factory per month to reduce emissions to the socially efficient level? How much better off would this make the fishery compared to a situation where the factory does not reduce any emissions? How much better off would the factory be if it accepts the fishery’s offer and reduces its emissions to the socially efficient level?


1) Fill in the blanks: Fishery will offer to pay $_______ making the fishery better off by $_______.. The factory will be better off by$______.

Solutions

Expert Solution

Fishery will offer to pay $ 50,000  making the fishery better off by $ 25,000. The factory will be better off by $ 25,000

Rahul Sunny answered 1 week ago
Next > < Previous

Related Solutions

suppose that a food processing plant and a chemical factory are located close to each other...
suppose that a food processing plant and a chemical factory are located close to each other on the banks of a river. The chemical factory uses the river to discharge its emissions. The food processing plant (located somewhere downstream) suffers damages from the emissions as it requires clean water for its operations. Assuming MAC = 240-2E and MD = 3E, answer the following questions. Draw this diagram before answering the questions below. You will be asked to upload the diagram...
Suppose that a food processing plant and a chemical factory are located close to each other...
Suppose that a food processing plant and a chemical factory are located close to each other on the banks of a river. The chemical factory uses the river to discharge its emissions. The food processing plant (located somewhere downstream) suffers damages from the emissions as it requires clean water for its operations. Assuming MAC = 240-2E and MD = 3E, answer the following questions. Draw this diagram before answering the questions below. You will be asked to upload the diagram...
Suppose there are two lakes located on a stream. Clean water flows into the first lake,...
Suppose there are two lakes located on a stream. Clean water flows into the first lake, then the water from the first lake flows into the second lake, and then water from the second lake flows further downstream. The in and out flow from each lake is 500 liters per hour. The first lake contains 100 thousand liters of water and the second lake contains 200 thousand liters of water. A truck with 500 kg of toxic substance crashes into...
Suppose there are two lakes located on a stream. Clean water flows into the first lake,...
Suppose there are two lakes located on a stream. Clean water flows into the first lake, then the water from the first lake flows into the second lake, and then water from the second lake flows further downstream. The in and out flow from each lake is 500 liters per hour. The first lake contains 100 thousand liters of water and the second lake contains 200 thousand liters of water. A truck with 500 kg of toxic substance crashes into...
Suppose there are two lakes located on a stream. Clean water flows into the first lake,...
Suppose there are two lakes located on a stream. Clean water flows into the first lake, then the water from the first lake flows into the second lake, and then water from the second lake flows further downstream. The in and out flow from each lake is 500 liters per hour. The first lake contains 100 thousand liters of water and the second lake contains 200 thousand liters of water. A truck with 500 kg of toxic substance crashes into...
Suppose Jones Company has orders from three customers located in the same market area. One order...
Suppose Jones Company has orders from three customers located in the same market area. One order has a total weight of 3,600 pounds, the second weighs 8,300 pounds, and the third weighs 12,100 pounds. The transportation carrier quotes a freight rate of $20 per hundredweight (or cwt.) for direct shipment to the customer for shipments weighing 1,000 to 4,999 pounds, $18 per cwt. for orders weighing 5,000 to 9,999 pounds, and $16 for shipments weighing between 10,000 and 15,000 pounds....
A researcher studies water clarity at the same location in a lake on the same dates...
A researcher studies water clarity at the same location in a lake on the same dates during the course of a year and repeats the measurements on the same dates 5 years later. The researcher immerses a weighted disk painted black and white and measures the depth​ (in inches) at which it is no longer visible. The collected data is given in the table below. Complete parts​ (a) through​ (c) below. Observation   Date   Initial Depth, X_i   Depth Five Years Later,...
A researcher studies water clarity at the same location in a lake on the same dates...
A researcher studies water clarity at the same location in a lake on the same dates during the course of a year and repeats the measurements on the same dates 5 years later. The researcher immerses a weighted disk painted black and white and measures the depth​ (in inches) at which it is no longer visible. The collected data is given in the table below. Complete parts​ (a) through​ (c) below. Observation 1 2 3 4 5 6 Date ​1/25...
Follow the water passing through lake ray Hubbard and Lake Lavon. What chemical is added at...
Follow the water passing through lake ray Hubbard and Lake Lavon. What chemical is added at the pumping stations for the water at the lakes? What chemicals are added at the plant and explain why each one is used to purify the water. What is the function of the settling basins? After leaving the settling basins the water flows to the sand filters. Describe the structure of a sand filter. How do they clean a sand filter? Water then flows...
A motel has ten rooms, all located on the same side of a single corridor and...
A motel has ten rooms, all located on the same side of a single corridor and numbered 1 to 10 in numerical order. The motel always randomly allocates rooms to its guests. There are no other guests besides those mentioned. a) Friends Molly and Polly have been allocated two separate rooms at the motel. What is the likely number of rooms between their rooms? b) Molly believes there is a greater than 1/3 chance that at most one room will...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT