Question
In: Economics
A steel industry emits, other harmful pollutants , CO. There are 8 identical firms in this...
A steel industry emits, other harmful pollutants , CO. There are 8 identical firms in this industry. Four of them are located near a city( urban area) while four of them are located in the country ( rural area) . They can install filters ( srubbers) in their exhaust to clean up part of their emissions. Their abatements costs related to CO clean up are described by MACi= 400- 8Ei, where i = 1,2,....8 . The emission of CO are locally dispersed. Due to higher population and structure density in the city , the marginal damage a unit of CO is causing in the urban area is higher than that in the rural area. More specifically these damages are described by MDu= 1.2 E and MDr=0.5 E
a. Find the units of emissions these 8 firms will emit if the CO emissions are left unregulated . How many units of emissions are released in each of the two areas
b. Find the aggregate marginal abatement cost function for each of the two area
c. What is the socially efficient level of emissions in each area and how many unit of emissions must be abated( in each area) compared to the unregulated level so that efficiency will be achieved
d. If the government sets the pollution levels at the socially efficient levels of emissions in each of the two areas, calculate the total abatement cost per firm in each of the two area
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the
firms are identical with identical cost curves.
Furthermore, suppose that a representative firm’s total cost is
given by the equation TC = 120 + q2 + 2q where q is the
quantity of output produced by the firm.
You also know that the market demand for this product is given
by the equation P = 1200 – 2Q where Q is the market quantity. In
addition you are told that...
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the
firms are identical with identical cost curves.
Furthermore, suppose that a representative firm’s total revenue
is given by the equation TR = q.p; where q is the quantity of
output produced by the firm and p the market price (=P).
The market demand for this product is given by the equation P =
5000 – 9Q where Q is the market quantity.
In addition you are told that the market...
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the
firms are identical with identical cost curves.
Furthermore, suppose that a representative firm’s total revenue
is given by the equation TR = q.p; where q is the quantity of
output produced by the firm and p the market price (=P).
The market demand for this product is given by the equation P =
5000 – 9Q where Q is the market quantity.
In addition you are told that the market...
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the
firms are identical with identical cost curves. Furthermore,
suppose that a representative firm’s total cost is given by the
equation. TC = 100 + q^2 + q where q is the quantity of output
produced by the firm. You also know that the market demand for this
product is given by the equation P = 1000 - 2Q where Q is the
market quantity. In addition, you are told that...
Suppose there is a perfectly competitive industry where all the firms are identical with identical cost...
Suppose there is a perfectly competitive industry where all the
firms are identical with
identical cost curves. Furthermore, suppose that a
representative firm’s total cost is given by the equation
where is the quantity of output produced by the firm. You also
know that the TC=200 +q^2+q where q is the quantity of output
produced by the firm. You also know that the market demand for this
product given by the equation P= 1000-2Q where Q is the market
quantity....
Consider the perfectly competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC)
Consider the perfectly competitive market for steel. Assume
that, regardless of how many firms are in the industry, every firm
in the industry is identical and faces the marginal cost
(MC), average total cost (ATC), and average
variable cost (AVC) curves shown on the following
graph. The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 firms in the market. (Hint: You can disregard the...
Suppose in Pakistan, all the firms are identical with identical cost curves which mean industry is...
Suppose in Pakistan, all the firms are identical with identical
cost curves which mean
industry is perfectly competitive. Now please consider this
following information about the
industry: A representative firm’s total cost is given by the
equation TC = 100 + q2 + q where
q is the quantity of output produced by the firm. You also know
that the market demand for
this product is given by the equation P = 1000 – 2Q where Q is the
market...
Sam’s pasta is identical to the pasta made by dozens of other firms and there is...
Sam’s pasta is identical to the pasta made by dozens of other
firms and there is free entry in the pasta. Buyers and sellers are
well informed about prices.
Points:
5
In what type of market does Sam’s operate?
What determines the price of pasta?
What determines Sam’s marginal revenue of pasta?
If pasta sell for $5 a packet and Sam offers his pasta for sale
at $5.50 a packet, how many packets does he sell?
If pasta sell...
Sam’s pasta is identical to the pasta made by dozens of other firms and there is...
Sam’s pasta is identical to the pasta made by dozens of other
firms and there is free entry in the pasta. Buyers and sellers are
well informed about prices.
In what type of market does Sam’s operate?
What determines Sam’s marginal revenue of pasta?
If pasta sell for $5 a packet and Sam offers his pasta for sale
at $5.50 a packet, how many packets does he sell?
If pasta sell for $5 a packet and Sam offers...
The industry for hockey pucks is perfectly competitive. All firms are identical with a coststructure that...
The industry for hockey pucks is perfectly competitive. All
firms are identical with a coststructure that is independent of the
number of firms in the industry. Each firm has a long-run average
cost curve that has its minimum of $2.00 at a quantity of 2500
pucks. The demand for pucks is given by Q = 1,400,000 - 400,000P.
a) Find long-run equilibrium price and output in the hockey puck
market. b) What is the long-run equilibrium production of each
firm?...
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