Suppose that demand for a product is Q = 1,200 – 4P and supply is Q = –200 + 2P.Furthermore, suppose that the marginal external damage of this product is $8 per unit. How many more units of this product will the free market produce than is socially optimal? Calculate the deadweight loss associated with the externality.
Answer to relevant QuestionsThe marginal damage averted from pollution cleanup is MD = 200 – 5Q. The marginal cost associated with pollution cleanup is MC = 10 + Q. a. What is the optimal level of pollution reduction? b. Show that this level of ...The National Institute on Drug Abuse describes four-year trends in teenage smoking, drinking, and other drug use on the Web at http://www.nida.nih.gov/infofax/hsyouthtrends.html. According to this site, for which age groups ...Evans, Farrell, and Montgomery (1999) found evidence that workplace smoking bans substantially reduce overall rates of smoking, particularly for people with longer work weeks. Why should workplace smoking bans be ...The citizens of Ballad used to pave 120 miles of roadways per year. After the government of Ballad began paving 100 miles of roadways per year itself, the citizens cut back their paving to 30 miles per year, for a total ...Suppose 10 people each have the demand Q = 20 – 4P for streetlights and 5 people have the demand Q = 18 – 2P for streetlights. The cost of building each streetlight is3. If it is impossible to purchase a fractional ...
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