Economists Don Fullerton and Thomas C. Kinnaman studied the effects 01 Charlottesville. Virginia's change from charging a flat fee for garbage collection to charging $0.80 per 32-gallon bag and found the following results:
The weight of garbage collected fell by 14 percent.
The volume of garbage collected fell by 37 percent.
The weight of recycling rose by 16 percent.
a. Why did recycling increase and garbage collection decrease?
b. Why did the weight of garbage fall by less than the volume of garbage collected?
c. Demonstrate, using supply and demand curves, the effect of the change In pricing on the volume of garbage collected.