Question

- The ivory industry has the following market demand and supply equations:

Demand: P = 500 – 2Q

Supply: P = 100 + 3Q

- (Question 6A: 2 points) Using these equations, calculate the
equilibrium quantity (Q
^{M}) in the ivory market.

- (Question 6B: 2 points) Using these equations, calculate the
equilibrium price (P
^{M}) in the ivory market.

- Unfortunately, the acquisition of ivory requires the killing of elephants which are now endangered, and their reduced numbers has greatly disturbed the ecosystem in which they live. Assume the Marginal External Costs (MEC) that arise as the result of this industry is $200.

(Question 6C: 4 points) Using the information from question 6 and the idea of the Marginal Social Cost (MSC) of obtaining ivory, calculate the socially optimal equilibrium quantity (q*).

- (Question 6D: 2 points) Using the information from question 6, calculate the socially optimal equilibrium price (p*).

- (Question 6E: 4 points) Using the information from question 6, calculate the deadweight loss created from this negative externality

Answer #1

The paper industry is the major industrial source of water
pollution. The inverse demand curve for the paper market (which is
also the marginal benefit curve) is P = 450 - 2Q where Q is the
quantity consumed when the price consumers pay is P. The inverse
supply curve (also the marginal private cost curve) for refining is
MPC = 30 + 2Q. The marginal external cost is MEC = Q where MEC is
the marginal external cost when the...

The demand and supply equations for the Wheat market are:
Demand: P = 200-4q Supply: P = - 50 + Q Where P = price per bushel,
and Q = quantity 1. Calculate the equilibrium price and quantity.
(1.5 Marks) 2. Suppose the government guaranteed producers a price
floor of AED 90 per bushel. Estimate the effect on the quantity
supplied and demanded. (1.5 Marks) 3. Would the price floor affect
the Market outcome? (Calculate the surplus or shortage )....

A market has supply and demand curves that follow the following
set of equations: Supply → P = 4QS + 10 Demand → P = -5QD + 280.
For both of these problems pictures are not required but the
problems may be much easier if you draw some.
a) Find the equilibrium price and quantity in this market and
the consumer and producer surplus from the equilibrium price and
quantity. (1 point)
b) If there is a ceiling price in...

The market for paper in a particular region has the supply and
demand curves: QD = 160,000 - 2,000P QS = 40,000 + 2,000P, where Q
is measured in hundred-pound lots, and P is price per hundred-pound
lot. There is currently no attempt to regulate the dumping of
effluent into streams and rivers by the paper mills. As a result,
dumping is widespread. The marginal external cost associated with
the paper production is given by the expression: MEC = 0.0002Q....

Suppose the market for corn is given by the following equations
for supply and demand:
QS = 2p − 2
QD = 13 − p
where Q is the quantity in millions of bushels per year and p is
the price.
Calculate the equilibrium price and quantity.
Sketch the supply and demand curves on a graph indicating the
equilibrium quantity and price.
Calculate the price-elasticity of demand and supply at the
equilibrium price/quantity.
The government judges the market...

The paper industry is the major industrial source of water
pollution. The inverse demand curve for the paper market (which is
also the marginal benefit curve) is P = 450 - 2Q where Q is the
quantity consumed when the price consumers pay is P. The inverse
supply curve (also the marginal private cost curve) for refining is
MPC = 30 + 2Q. The marginal external cost is MEC = Q where MEC is
the marginal external cost when the...

Suppose an industry demand curve is P = 90 − 2Q and each firm’s
total cost function is C = 100 + 2q 2 .
(a) (6 points) If there is only one firm in the industry, find
the market price, quantity, and the firm’s level of profit.
(b) (6 points) Show the equilibrium on a diagram, depicting the
demand curve, and MR and MC curves. On the same diagram, mark the
market price and quantity, and illustrate the firm’s...

Consider a competitive
market in which the market demand for the product is expressed as:
P = 164 - 0.0002Q, and the supply of the product is expressed as: P
= 4 + 0.0003Q. The typical firm in this market has a marginal cost
of MC = 4 + 1.2q.
a. Determine the
equilibrium market price and output. Calculate the consumer surplus
and the producer surplus at equilibrium in the industry. (2+2+2 = 6
points)
b. Determine the
output of...

4. Let's say that the market demand curve for gasoline is Q =
100 - P (however, P is price, Q is quantity), and that the private
cost curve of the gasoline supply industry is MC = 10 + Q. And
suppose that the marginal cost curve due to the marginal damage of
pollution from gasoline supply is MEC = Q.
(a) First, calculate and graph the market balance of the price
and sales of this gasoline market when there...

Q13. The supply and demand in the market for canned beets are
given by the following functions:
QD = 25,500 – 500P
QS = 500 + 500P
The equilibrium price and quantity in this market are
a)
Q* = 750 ; P* = $0.50
b)
Q* = 25,250 ; P* = $0.50
c)
Q* = 25,000; P* = $1
d)
Q* = 13,500; P* = $26
e)
Q* = 13,000 ; P* = $25
The market supply and...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 9 minutes ago

asked 22 minutes ago

asked 24 minutes ago

asked 24 minutes ago

asked 30 minutes ago

asked 39 minutes ago

asked 45 minutes ago

asked 47 minutes ago

asked 51 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago