FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

3. Demand for a product called widgets is given by p = 200 - 2Y. Supply is given by p = Y/2 + 5,

image text in transcribed

3. Demand for a product called widgets is given by p = 200 - 2Y. Supply is given by p = Y/2 + 5, where Y is the quantity of widgets per month and p is the price of widgets. Assume a perfectly competitive industry. a) Graph the supply and demand curves, find the competitive market price and quantity of widgets and show them on the graph. (3) b) Suppose the production of widgets creates pollution damages of $5 per unit of widget produced. Find the economically efficient levels of price and quantity of widgets and show them on your graph. (3) c) Explain how a tax could be used to steer the competitive market outcome towards the economically efficient outcome. (3)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Economics and Business Strategy
Managerial Economics and Business Strategy

Authors: Michael R. baye

7th Edition

978-0073375960, 71267441, 73375969, 978-0071267441

More Books

Students explore these related Economics questions

Question

What quarterly payment is required to pay off a $ 2 0 , 0 0 0 loan in five years if the interest rate is 5 . 5 compounded semi annually

Answered: 3 weeks ago

Question

QUIZ... Let D be a poset and let f : D D be a monotone function. (i) Give the definition of the least pre-fixed point, fix (f), of f. Show that fix (f) is a fixed point of f. [5 marks] (ii) Show that...

Answered: 3 weeks ago

Question

PLEASE GIVE CORRECT ANSWERS Prove that the number of comparators in any sorting network is (n log n). [4 marks] (ii) What does Part (d)(i) imply in terms of the depth of any sorting network? [1 mark]...

Answered: 3 weeks ago

Question

Sparkle is one firm of many in the market for toothpaste, which is in long-run equilibrium. a. Draw a diagram showing Sparkles demand curve, marginal-revenue curve, average total- cost curve, and...

Answered: 3 weeks ago

Question

The leading brand of dishwasher detergent has a 30% market share. A sample of 25 dishwasher detergent customers was taken. What is the probability that 10 or fewer customers chose the leading brand?

Answered: 3 weeks ago

Question

In-compressible steady flow in the inlet between parallel plates is uniform, V 0 = 8 cm/s, while downstream, the flow develops into the parabolic profile v x = az(z 0 - z), where a is a constant....

Answered: 3 weeks ago

Question

2. Identify the faculty members in your psychology department whose backgrounds are in experimental, developmental, social, cognitive, or biopsychology. Select one whose research area interests you...

Answered: 3 weeks ago

Question

Summit Company makes two models of snowboards, the Junior and the Expert. Its basic production information follows: Summit has monthly overhead of $484,746, which is divided into the following cost...

Answered: 3 weeks ago

Question

An Ontario based incorporated business has three employees who are paid as follows for the first payroll in a new calendar year: Assume they are all paid on the same pay date the weekly and bi-weekly...

Answered: 3 weeks ago

Question

Balfour Corporation acquired 100% of Tobac Inc., a foreign corporation, for 33,000,000 FC. The acquisition, which was accounted for as a purchase, occurred on July 1, 20X5, when Tobacs equity, in FC,...

Answered: 3 weeks ago

Question

Please help! Cusic Industries had the following operating results for last year; sales = $25,700; cost of goods sold = $18,400; depreciation expense = $3,450; interest expense = $790. At the...

Answered: 3 weeks ago

Question

Humans, especially children, have an amazing capability to learn language. Within the first year of life, children will have learned many of the necessary concepts to have functional language,...

Answered: 3 weeks ago

Question

Martina was geared up for a long day on the bike trail and began her day with a balanced breakfast. Although she brought plenty of water with her, she was also able to stay hydrated because her...

Answered: 3 weeks ago

Question

Eight-year-old Rubio does not play with his classmates, and when he does have to interact with them he tends to get frustrated and doesn't understand how to interact with them. Even at home, Rubio...

Answered: 3 weeks ago

Question

People disagree regarding the extent to which we should be anxious and fearful of how new technologies will affect our society.What are the potential ramifications of being constantly connected to...

Answered: 3 weeks ago

Question

When planning instruction, a teacher must integrate curriculum and instructional strategies that students can relate to on a personal level. Consider the community in which you plan to teach....

Answered: 3 weeks ago

Question

How can I turn this into a pivot table that displays the same information?

Answered: 3 weeks ago

Question

Briefly describe the following types of group life insurance plans: a. Group term life insurance b. Group accidental death and dismemberment insurance (AD&D) c. Group universal life insurance d....

Answered: 3 weeks ago

Question

4.6 Define the concept of an adjustment disorder and describe its key features.

Answered: 3 weeks ago

Question

In the beginning of the chapter, a scenario was presented where a woman was talking loudly to no one in particular. Later she reported that she had been possessed by the spirit of an animal and was...

Answered: 3 weeks ago

Question

h. Describe how commodity futures markets can be used to reduce input price risk. i. It is January, and Tennessee Sunshine is considering issuing $5 million in bonds in June to raise capital for an...

Answered: 3 weeks ago

Previous Question Next Question