This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: If an average cost pricing rule is imposed on the firm in the figure above, the deadweight loss will ... (Read 117 times)

Tirant22

  • Hero Member
  • *****
  • Posts: 532
on: Jun 29, 2018
If an average cost pricing rule is imposed on the firm in the figure above, the deadweight loss will be
 
  A) zero.
  B) 150.
  C) 50.
  D) 250.

Question 2

Suppose the market for aluminum is perfectly competitive and unregulated. If aluminum factories emit pollution, the marginal social cost of aluminum is less than the market price. True or false? Explain.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

nikmaaacs

  • Sr. Member
  • ****
  • Posts: 335
Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

The statement is false. Pollution is an external cost, and marginal social cost equals marginal private cost plus marginal external cost. In an unregulated competitive market, the market price equals marginal private cost. As a result, the marginal social cost of aluminum is its market price, which equals its marginal cost, plus the marginal external cost of pollution. So the marginal social cost of aluminum is higher than the market price.


Tirant22

  • Member
  • Posts: 532
Reply 2 on: Jun 29, 2018
Wow, this really help

amit

  • Member
  • Posts: 364
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

Did you know?

As of mid-2016, 18.2 million people were receiving advanced retroviral therapy (ART) worldwide. This represents between 43–50% of the 34–39.8 million people living with HIV.

Did you know?

The Centers for Disease Control and Prevention has released reports detailing the deaths of infants (younger than 1 year of age) who died after being given cold and cough medications. This underscores the importance of educating parents that children younger than 2 years of age should never be given over-the-counter cold and cough medications without consulting their physicians.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

Did you know?

The FDA recognizes 118 routes of administration.

Demonstrate the Application of Triangular, Figure-Eight, and Tubular Bandages Demonstrate the Application of Triangular, Figure-Eight, and Tubular Bandages
Conservation biology arose in response to biodiversity loss Conservation biology arose in response to biodiversity loss
Cost of Laptops Cost of Laptops
How to calculate the gain and loss gene numbers with low bootstrap of phylogenetic tree? How to calculate the gain and loss gene numbers with low bootstrap of phylogenetic tree?
Chart showing average yearly dose of radiation from natural and human-made sources Chart showing average yearly dose of radiation from natural and human-made sources
In 2000, the average charge of tax preparation was 95 . Assuming a normal distribution and a ... In 2000, the average charge of tax preparation was 95 . Assuming a normal distribution and a ...
Video: Otitis Media

For a complete list of videos, visit our video library