3. Demand for a product called widgets is given by p= 200 - 2Y. Supply is given by p = Y/2 + 5, where Y is the quantity of widgets per month and p is the price of widgets. Assume a perfectly competitive industry. a) Graph the supply and demand curves, find the competitive market price and quantity of widgets and show them on the graph. (3) b) Suppose the production of widgets creates pollution damages of $5 per unit of widget produced. Find the economically efficient levels of price and quantity of widgets and show them on your graph. (3) c) Explain how a tax could be used to steer the competitive market outcome towards the economically efficient outcome. (3)

A large share of the world supply of cocoa beans comes from Ghana and Ivory Coast. Suppose that the marginal cost of producing cocoa beans is constant at GHC1000 per bag and the demand for cocoa beans is described by the following schedule. Price (GHC) Quantity (bags) 5000 6000 7000 8000 9000 10000 11000 12000 8000 7000 6000 5000 4000 3000 2000 1000 a) If there were many suppliers of cocoa beans, what would be the price and quantity? b) If there were only one supplier of cocoa, what would be the price and quantity? c) At a meeting in October 2017 in Accra, the leaders of the two leading producers of cocoa beans discussed the possibility of cooperating to boost the price of cocoa. If Ghana and Ivory Coast formed a cartel, what would be the price and quantity? If the countries split the market evenly, what would be Ghana's production and profit? f) What would happen to Ghana's profit if it increased its production by 1000 cocoa while Ivory Coast stuck to the cartel agreement? g) Use your…

1. There are two brands of cigarettes X, Y. The demand for each is as follows: Qx = 80 - 2p   Qy = 60 - 0.5p Assume that the marginal cost of producing cigarette X is $10, the marginal cost of producing cigarette Y is $8, and that the market for both cigarettes is perfectly competitive. Assume that each pack of cigarette X smoked does $5 worth of health damage to the smoker, and a total of $4 worth of health damage to the smoker’s neighbors via second-hand smoke. Each pack of cigarette Y smoked does $6 worth of health damage to the smoker, and $5 health damage to the smoker’s neighbors. (a) Explain why the public supply curves differ from the private supply curves, and how this represents the externality from second-hand smoke. Highlight the area(s) of your diagram that represents a social loss. (b) Calculate the social loss for both. (c) Suppose the government decides to pursue a Pigouvian solution to eliminate social loss. What's amount of tax or subsidy would the government…

Only part (b) please, thank you!