Question
1A)A private Garbage Disposal Company 'Waste Knot' has been lobbying Mayor Stewart of Coquitlam to allow them to run the Garbage collection service for the
1A)A private Garbage Disposal Company 'Waste Knot' has been lobbying Mayor Stewart of Coquitlam to allow them to run the Garbage collection service for the city at aprice of $200per Q.Currently the demand per year for garbage collection is P = 600 - 0.05Q, and the marginal cost (and price) of city provided service is $100 per Q (Q is households).Calculate how much service, Q, the Company would be willing to provide and how much would it be willing to spend on "lobbying" to get the contract.
B)If the City switches to the privately provided service, calculate thedead weight lossand maximum potential social waste of resources that would result.
(Must show calcuations.)
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