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Suppose: the Cement industry is operating in competitive markets, no external benefits but each unit of production generates fixed amount of negative externalities, that is
Suppose: the Cement industry is operating in competitive markets, no external benefits but each unit of production generates fixed amount of negative externalities, that is estimated by 1000 L.E per ton,, the equilibrium quantity in the market is 100,000 ton per week,and the market price 10,000 L.E. Based upon the previous (graphically and numerically) answer: - Is this market could achieve efficiency in the 1 cement industry?? And why? 2- How to internalize these negative externalities in the market's decisions especially producer's decisions (government policy). 3- Suppose the changes of quantity that will satisfy efficiency is 20,000 ton per week, determine numerically and graphically how much is the efficiency losses / gains of this government policy? 4- Analyze the effects of this policy on the producers, consumers and government. Third: (10- points
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