Show that in a symmetric oligopoly where the firms technologies satisfy assumption 5.1 , the first-best outcome
Question:
Show that in a symmetric oligopoly where the firms’ technologies satisfy assumption 5.1 , the first-best outcome can be achieved by a tax on emissions and a subsidy on output. Determine the optimal levels of the tax and the subsidy.
assumption 5.1
Transcribed Image Text:
Assumption 5.1 The cost function C(x,e) is twice continuously differentiable with C()>0, and for any production level x there is an emission level er such that C(x,e) = 0. Furthermore C(x,e) <0 Ve
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 0% (1 review)
In a symmetric oligopoly all firms face the same cost function and have the same ability to control emissions Without any government intervention each firm would produce at a level where their private ...View the full answer
Answered By
Sandhya Sharma
I hold M.Sc and M.Phil degrees in mathematics from CCS University, India and also have a MS degree in information management from Asian institute of technology, Bangkok, Thailand. I have worked at a international school in Bangkok as a IT teacher. Presently, I am working from home as a online Math/Statistics tutor. I have more than 10 years of online tutoring experience. My students have always excelled in their studies.
4.90+
119+ Reviews
214+ Question Solved
Related Book For
A Course In Environmental Economics
ISBN: 9781316866818
1st Edition
Authors: Daniel J Phaneuf, Till Requate
Question Posted:
Students also viewed these Business questions
-
Consider a symmetric oligopoly in which firms technologies satisfy assumption 5.1. Assume that firms get part of the tax revenues refunded, according to their market shares. The refund share is 0 A...
-
Show that in a symmetric oligopoly with free entry and firms technologies satisfying assumption 5.1 the first-best outcome can be achieved by an emission tax, a subsidy on output, and either an entry...
-
Draw the state diagram of a finite automaton that recognizes the language of all strings over {a, b,c} that start and end with different symbols. Note that the shortest strings in this language have...
-
Employee earnings records for Redding Company reveal the following gross earnings for four employees through the pay period of December 15. D. Edwards ........... $83,500 A. Seligman...
-
The color red is often associated with anger and male dominance. Based on this observation, Hill and Barton (2005) monitored the outcome of four combat sports (boxing, tae kwan do, Greco-Roman...
-
Morley Products is a wholesale distributor that competes in three marketsCommercial, Home, and School. It prepared the following segmented income statement: Although the Commercial Market has the...
-
What impact does the organizational structure of a firm have on the control system?
-
Recording manufacturing overhead costs in T-accounts Gill Corporation manufactures model airplanes. The company purchased for $170,000 automated production equipment that can make the model parts....
-
Question 2 Points 3 A 42 inch wire is bent into the shape of a rectangle whose width is twice its length (/). Set up an equation to find the length of the rectangle. 2(21+ 1) = 42 21.1 = 42 O (21+)/2...
-
Carefully review the following economic concepts and make sure you have a clear understanding of them: Neoclassical economics, absolute scarcity, relative scarcity, natural capital, human-made...
-
Show that in a symmetric Cournot oligopoly under both assumptions 5.1 and 5.2 (see Chapter 5), profits decrease if the emission tax goes up. assumption 5.1 assumption 5.2 Assumption 5.1 The cost...
-
D Faculti started in business buying and selling law text books, on 1 January 20X3. At the end of each of the next three years, his figures for debtors, before writing off any bad debts, were as...
-
The Healthcare Financial Management Association says that inadequate or incorrect information gathered prior to care, is the single greatest reason for not billing or collecting accounts receivable...
-
The April sales budget of the Lennys drive-in calls for sales of $650,000. The store expects to begin April with a $100,000 inventory and end the month with a $110,000 inventory. The cost of goods...
-
An investor is facing a single factor economy with two portfolio, both of which are well diversified and fairly priced: Portfolio A with an expected return of 12% and a systematic risk factor of 1.0...
-
ACB Inc. has 100,000 bonds outstanding that have 12 years of life remaining and carry a10% coupon (paid semi-annually). The firm also has 8 million shares of preferred stock thatpays a dividend of $2...
-
Slow Poke Limited operates in a low growth industry but generates high stable operating cashflows. Slow Poke's beta of 0.79 reflects the company's low risk. If the risk free rate is 4.7% and the...
-
Purpose: To help you understand and compare the performance of two companies in the same industry. Find the Columbia Sportswear Company Annual Report located in Appendix A and go to the Financial...
-
Prove that if Σ an is absolutely convergent, then a. an
-
A. A simple regression model over the 1980-2003 period where the Y-variable is the Disney year-end stock price and the X-variable is Disneys earnings per share reads as follows (statistics in...
-
A. A simple regression model over the 1980-2003 period where the Y-variable is the Disney year-end stock price and the X-variable is Disneys earnings per share reads as follows (statistics in...
-
Some people were concerned that the 1990 amendments to the Clean Air Act (CAA) would generate hot spots of pollutionlocalized areas with very high concentrations of pollutants. Why might the...
-
Sports Hats, Etc. has two product lines-baseball helmets and football helmets. Income statement data for the most recent year follow: Total Baseball Helmets Football Helmets Sales revenue $460,000...
-
HDFS 3350 DJ Richards wondered if he had adequate life insurance for his family if he were to pass away. He decided to complete the Life Insurance Worksheet. His current yearly income is $38,400. He...
-
Reimel Furniture Company, Inc. incurred the following costs during 20x2. Direct material used Direct labor Manufacturing overhead $174,000 319,000 160,000 During 20x2, products costing $121,000 were...
Study smarter with the SolutionInn App