glass bottles can be either recycled (crushed and re-melted) or reused. the market will tend to...

glass bottles can be either recycled (crushed and re-melted) or reused. the market will tend to choose the cheapest path. which factors will tend to affect the relative cost of these options? is the market likely to make the efficient choice? are the “bottle bills” passed by many of the states requiring deposits on bottles a move toward efficiency? why? answer

Expert Solution

Factors such as is the government incentivising or giving tax rebates will help determine the cost of bottles, in addition if there is no initiative by the government to compel eco friendly bottles than the bottles will likely be costly as no one is willingly buying them. The price of the plastic bottle will also act as a major factor, as it acts as an alternative. The beverage suitability and durability in the recycled bottle will play a major role on whether firms implement it and it also helps determine the cost of the finished good. The cost of setting up a factory to recycle products and the feasibility of it will play an important role.

Market will likely make the efficient choice in the long run in terms of cost as cost will be determined according to the supply and demand function. Efficiency in terms of recycled product supply and demand will depend on the above factors.

Bottle bills are definitely a move towards efficiency in terms of the bottle getting ensured that it will recycle. Even if the bottle is not returned, the money collected by the government or store as deposit will go for other funding means. The refund incentivises the customer to return the bottle and he/she gets a personal benefit by getting back money which improves efficiency.

Rahul Sunny answered 1 year ago

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