A large urban hospital produces solid waste. The table below shows the hospitals marginal cost of reducing

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A large urban hospital produces solid waste. The table below shows the hospital’s marginal cost of reducing waste and the marginal benefit to society of doing so.

Tonnes of waste abated

MC($)

MB($)

1st

1000

4000

2nd

1500

3800

3rd

2000

3500

4th

3000

3000

5th

4500

2000

6th

7000

MB($)


a. Draw a scale diagram of the marginal costs and benefits of reducing solid waste.

b. What is the socially optimal amount of waste to abate?

c. What is the net benefit to society of abating the socially optimal amount of waste?

d. What is the net benefit to society of abating the final tonne of waste if the hospital abates six tonnes?

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Related Book For  answer-question

Microeconomics

ISBN: 9780134835839

16th Canadian Edition

Authors: Christopher T.S. Ragan

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