Question

5. When Boomer Cement was forced to “i.t.n.e.”, what happened to its cost curve?   6. If an entire industry is polluting “too much”, and it is forced to “i.t.n.e.”, what happens to the Supply, the Price, and the Quantity produced in that market, in theory?   7. What are the four “Market Structures”? Please describe each Market Structure and give an example of a firm that belongs in each of the four Market Structures, preferably a firm that was not discussed previously. 8. What is a “natural monopoly”? Please give an example. 9. Why are natural monopolies often regulated by some sort of Government Regulatory Agency?   10. In YOUR OPINION, SHOULD THE STATE OF CALIFORNIA HAVE TAKEN OVER PG&E? Why or why not?

Answer 1

Since first two questions relate to the same topic, the first 2 are answered below

Kindly ask rest of the questions in a separate post

5.

Note: i.t.n.e. refers to internalize the negative externality

When a company is forced to internalize its negative externality, it means it will now have to take into account the external cost of producing goods, which it was earlier ignoring.

This will increase its cost curve, shifting it upwards to the left, leading to an increase in price level and fall in output.

6.

When the entire industry is to internalize its negative externality, its supply curve will shift upwards to the left (as cost of production will now increase due to inclusion of external cost)

This will lead to an increase in price and decrease in output produced in the market.