Question

The ivory industry has the following market demand and supply equations: Demand: P = 500 –...

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

Demand: P = 500 – 2Q

Supply: P = 100 + 3Q

  1. (Question 6A: 2 points) Using these equations, calculate the equilibrium quantity (QM) in the ivory market.

  1. (Question 6B: 2 points) Using these equations, calculate the equilibrium price (PM) in the ivory market.

  1. 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*).

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

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

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The paper industry is the major industrial source of water pollution. The inverse demand curve for...
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...
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 →...
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 =...
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:            ...
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 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...
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...
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...
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...
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
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT