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
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Chapter 9, Problem 1.6CE
To determine
To find:Reduction in per student operating expenditures by adding one more student.
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A plant with a marginal abatement function described by MAC = 75-5E is polluting the
town's water supply. Emissions are measured in tons per year.
a) Government regulators propose that the company pay a tax equal to $30 per ton
of emissions. How many tons will the firm abate when faced with this tax, and
how much better off will it be compared to if it does no abating.
b) Suppose that, instead of the tax, the government offers to pay the firm $30 for
each ton of emissions it abates. How many tons will the firm abate, and how much
better off will it be compared to if it does no abating?
c) If damages caused by the firm's emissions is described by the function MD = 5E,
what tax rate would encourage the firm to abate to the socially efficient level of
emissions? Compute the private and social compliance cost and the net benefit
accruing to society from the socially efficient emissions tax.
%3D
The function that relates the inverse of speed (1/S)
(i.e., the time in minutes that it takes to travel 1
mile) to traffic (T) on a highway is 1/S = 4 + 0.05T.
Demand for traffic (measure as traffic volume
minute) on this road is T=6880-70 (1/S)
Find the equilibrium traffic volume in the absence
of any congestion toll.
Find the marginal cost function for traffic volume,
where cost is expressed as travel time per mile in
minutes.
per
Find the optimal level of traffic volume.
Find the optimal congestion toll, expressed in
minutes. (Imagine that the congestion toll consists
of sitting in the “penalty box" for this period of
time.)
The function that relates the inverse of speed (1/S) (i.e., the time in minutes that it takes to travel 1 mile) to traffic (T) on a highway is 1/S = 4 + 0.05T.
Demand for traffic (measure as traffic volume per minute) on this road is T=6,880- 70-(1/S).
a. Find the equilibrium traffic volume in the absence of any congestion toll.
b. Find the marginal cost…
Green et al. (2005) estmate the supply and demand curves for Californa processod tomatoes. The supply function is: \[ \ln \left(Q_{s}\right)=0.200+0.550 \ln (p) \] whereQis the quantify of processing tomatoes in milions of tons per year andpis the price in dollars per ton. The demand function is: \[ \ln \left(Q_{d}\right)=2600-0.200 \ln (p)+0.150 \ln \left(p_{1}\right) . \] wherep1is the price of tornato paste (which is what processing tomatoes are used to produce) in dollars per ton. Supposept=$119Determine how the equilerium price and quantity of processing tomatees change if the price of tomato pasise tails by16%. If the price of tomato paste fals by18%, then the equaborium price will by 5 (Enter a numene response using a real number rounded to two decimal places)
Chapter 9 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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