Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 16, Problem 9E
a)
To determine
To Discuss: The solution from point of view of economic efficiency, equity and the future long term impact on the firm, by imposing a tax on the quantity of pollution emitted by Branding Iron Products.
b)
To determine
To Discuss: The solution from point of view of economic efficiency, equity and the future long term impact on the firm, by imposing a tax on the quantity of pollution emitted by Branding Iron Products, when the firm, operates its plant in West Star, Texas.
c)
To determine
To Discuss: The solution from point of view of economic efficiency, equity and the future long term impact on the firm.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The table below shows the demand for pollution permits to emit hydrocarbons in a particular industrial park. Each permit allows the owner to
release one tonne of pollutants into the atmosphere.
Price per
Pollution Permit
Quantity of Permits
$4,500
100
4,000
200
3,500
300
3,000
400
2,500
500
2,000
600
1,500
700
were charged, how many tonnes of pollutants would be discharged into the atmosphere, assuming a straight-line
a. If fee for a pollution perm
demand curve?
Quantity:
tonnes
b. Suppose government were to set a fee of $2,500 per pollution permit. How many tonnes of pollutants would now be dumped? What is the total
revenue received by government?
Quantity:
tonnes
Total revenue: $
c. Suppose that a new technology allows for a significant reduction in hydrocarbons at a relatively low cost so that the demand for pollution permits
in the industrial park drops by 200 tonnes. Assuming that government holds the permit fee at $2,500, how many tonnes of pollutants would now be
dumped? What…
A polluting firm’s marginal abatement cost is MACi = 50 – 0.25ei . If a regulator imposes a per-unit emissions tax of t = 10, what level of emissions does the firm choose under the tax?
A polluting firm’s marginal abatement cost is MACi = 50 – 0.25ei . If a regulator imposes a per-unit emissions tax of t = 10, how many units did the firm abate relative to the unregulated environment?
suppose the regulator imposes a Pigouvian tax on each unit of emissions. Calculate each firm's emissions level and the total tax collected.
Chapter 16 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Knowledge Booster
Similar questions
- The primary source of air pollution in the small town of Smokey, Nevada is a nearby steel mill. The local environmental agency has decided that the mill needs to reduce its emissions because the town's population is located directly downwind from it. Currently the agency is considering three different approaches to reducing pollution from the mill: a technology standard, an emission standard and an emission tax. Why might the owner of the mill prefer an emission standard to a technology standard that would produce the same level of emissions? a Because with emission standards the polluter is more flexible in selecting the technology that will minimize her abatement cost Ob. Because polluters usually try to stick to their existing technology O C. Because it has been proven to be easier to implement O d. Because polluters, as all producers are suspicious about new technologiesarrow_forwardDiscuss the threats of independence in the Waste management scandal 1998arrow_forwardFor centuries, Alaskans relied on salmon and other freshwater fish for protein, oil, and other nutrients. But when jetliners began flying tourists who love fishing from Seattle to Anchorage in the 1950s, the stock of Alaskan salmon began falling. The Alaska Department of Fish and Game had concerns about the high fraction of young salmon caught before they could reproduce. Following the advice of environmental scientists and economists, the Alaska Department of Fish and Game introduced restrictions on the minimum size (28 inches) and the number of salmon caught (5 per day). Among their concerns was the high fraction of young salmon caught before they could reproduce. a. Alaskan salmon are a b. In the graph, place point A on the market equilibrium and place point B on the socially optimal outcome. Price of salmon Market for Alaskan salmon B A Marginal social cost Marginal private cost Marginal benefitarrow_forward
- Suppose the Ontario government has the following information: the emission reduction cost for an industry is estimated to be MAC = 500 – 2E and the estimated damage cost function is MD = 0.5E. What would be the optimal emission standard set by the government and what would be the total emission reduction costs for the industry to meet the standard? please include a grapharrow_forwardSuppose that a firm's marginal abatement cost function with existing technologies is MAC = 8 - E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 4 - 0.5E. With an emissions tax of $2, the benefits of adopting the new technologies equal $____.arrow_forwardThere are a variety of taxes that a person pays when buying an airline ticket. One tax is called the LUST fuel tax. LUST stands for leaking underground storage tank. The LUST tax is to establish a trust fund to provide money for oversight and corrective action against owners of leaking underground storage tanks and provides money for cleanup of LUST sites where the owner or operator is unknown. Is it efficient for customers of airlines to beforced to pay the tax?arrow_forward
- Suppose that a firm's marginal abatement cost function with existing technologies is MAC = 12 - E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 6 - 0.5E. With an emissions tax of $3, the benefits of adopting the new technologies equal $__. Please round your final answer to two decimal places if necessary. Answer:arrow_forwardExamine positive and negative externalities in an industrial sectorarrow_forwardSuppose that a firm's marginal abatement cost function with existing technologies is MAC = 18 - 2E. If the firm adopts new pollution abatement technologies, then its marginal abatement cost function will become MAC = 9 - E. With an emissions tax of $4, the benefits of adopting the new technologies are $____.arrow_forward
- Supply curves for the production of oil in Sanaton are shown in the diagram below. Supply based on both private and private+social costs is shown. Answer the following questions based on the diagram. Supply (Private + Social) Supply (Private) VE (16000 $70 (22000,$59) Demand Price Quantity What is the equilibrium quantity when negative externalities of producing oil are not taken into account? What is the equilibrium price when negative externalities are not taken into account?arrow_forwardIt is popular view in economic and legal literature that grandfathering or emission trading is inconsistent with polluter pays principle. True Falsearrow_forwardThe table below gives the marginal abatement costs of three polluting firms in an industry. The industry is regulated with an emission tax of $6. Marginal abatements costs ($/ton) Emissions (tons/week) 10 Firm 1 Firm 2 Firm 3 0 0 2 3 4 2 12 3 18 4. 5 10 24 4 12 36 6. 3 14 60 18 72 8. 23 84 29 108 10 a. What level of emissions does each firm choose? Explain how they respond to the emissions tax. b. What are cach firm's total compliance costs? Show your work. c. What is the total level of abatement? Discuss whether this abatement is achieved at the least cost for society.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning