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Author Question: The following diagram shows the production of fertiliser by a perfectly competitive ... (Read 94 times)

lak

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on: May 25, 2020

Question 1

The following diagram shows a price-taking firm that creates pollution when it produces. As a result, the firm's marginal social cost (MSC) is above its marginal private cost (MC).

What is the optimum tax?
◦ cd
◦ ca
◦ ab
◦ da

Question 2

The following diagram shows the production of fertiliser by a perfectly competitive profit-maximising firm. Production of the good leads to pollution of the environment, however. This pollution is an external cost to the firm.



The marginal social cost curve is shown by one of the two curves I or I. Assume that the government imposes a 'pollution tax' on the firm at a constant rate per unit of output. What must the size of the tax per unit be in order to persuade the firm to produce the socially efficient level of output?
◦ C1 — C3
◦ C3 — C4
◦ C2 — C5
◦ C3 — C5
Essential Economics for Business ¦ Sloman, Jones ¦ 5th Edition
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Marked as best answer by lak on May 25, 2020

fauacakatahaias

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Reply #1 on: May 25, 2020
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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lak

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Reply 2 on: May 25, 2020
Great answer, keep it coming :)

alvinum

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Reply 3 on: Yesterday
Excellent

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