The figure shows the marginal private cost and marginal social cost of producing bananas while using pesticides. The per-tonne price of bananas is constant at $400. Costs (5) 900 800 700 600 500 400 300 200 100 Marginal social cost Costs imposed on fisherman by plantations using Weevokil $270 At A, reducing production by one ton reduces plantation's profits by $400. A is the banana producers' profit-maximizing outcome. The marginal external cost at A is $670. A is the Pareto optimal outcome. Based on the figure, which of the following statements regarding point A is correct? Marginal private cost 0 0 10,000 20,000 30,000 40,009 50.000 60.000 70.000 80.000 90,000 100,000 Quantity of bananas, Q (tonnes per year) Price

The figure shows the marginal private cost and marginal social cost of producing bananas while using pesticides. The per-tonne price of bananas is constant at $400. Costs (5) 900 800 700 600 500 400 300 200 100 Marginal social cost Costs imposed on fisherman by plantations using Weevokil $270 At A, reducing production by one ton reduces plantation's profits by $400. A is the banana producers' profit-maximizing outcome. The marginal external cost at A is $670. A is the Pareto optimal outcome. Based on the figure, which of the following statements regarding point A is correct? Marginal private cost 0 0 10,000 20,000 30,000 40,009 50.000 60.000 70.000 80.000 90,000 100,000 Quantity of bananas, Q (tonnes per year) Price

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Only typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit. Pollution taxes…
Supply 10.00 9.00 8.00 7.00 6.00 MSC 5.00 4.00 Demand 3.00 2.00 1.00 25000 50000 75000 100000 125000 150000 175000 200000 If a tax or subsidy were used to correct the externality, what would be chosen? O a. tax = $4 O b. subsidy = $3 O C. tax = $3 O d. subsidy = $4 B.
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Question #1: Assume agricultural products are identical and there are many sellers and buyers of agriculture products:a. State the profit maximizing condition for each seller of agricultural products.b. Graphically, show the market equilibrium of the industry and a seller where economic profits equal zero. Please include marginalrevenues, demand curve, price and quantity at the equilibrium.c. From part b above, if the number of buyers increases, show the new short run equilibrium for a seller and the industry as awhole.
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