Light? Bulbs: Shining a Light on Bulb Recycling

?We've received several questions about recyclinglight? bulbs, ranging from regular incandescents to compactfluorescents? (CFLs). Home Depot Canada is aiming to recycle1.5 million bulbs by 2011. Lasting six to 10 times longer than theaverage incandescent bulb and using up to 75 per centless? electricity, CFLs save on power consumption and cut yourelectricity bill.

Calgary

Herald?,

March? 27, 2008

The graph shows the market for CFLs.

Suppose the government decides to subsidize CFLs.

Draw the S? = MSC? - subsidy curve thatresults in the efficient quantity of lightbulbs. Labelit.

Draw a point to show the efficient quantity and themarginal private benefit at this quantity.

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5.00 4.00- 3.00- 2.00 1.00- Price and cost (dollars per bulb) S=MC 0.00+ 0 MSB D=MB 6 7 1 2 3 4 5 8 Quantity (millions of bulbs per year) >>> Draw only the objects specified in the question. 9 10