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 155 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
Gracias!

mochi09

  • Member
  • Posts: 335
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Human neurons are so small that they require a microscope in order to be seen. However, some neurons can be up to 3 feet long, such as those that extend from the spinal cord to the toes.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

Did you know?

Fewer than 10% of babies are born on their exact due dates, 50% are born within 1 week of the due date, and 90% are born within 2 weeks of the date.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

According to the American College of Allergy, Asthma & Immunology, more than 50 million Americans have some kind of food allergy. Food allergies affect between 4 and 6% of children, and 4% of adults, according to the CDC. The most common food allergies include shellfish, peanuts, walnuts, fish, eggs, milk, and soy.

Average winter rainfall and variation in rainfall among sites inhabited by Suromalus ater Average winter rainfall and variation in rainfall among sites inhabited by Suromalus ater
Uranus revolves around the Sun once every 84 Earth years. Its average distance from the Sun is rough Uranus revolves around the Sun once every 84 Earth years. Its average distance from the Sun is rough
In this cartoon, Boss Tweed welcomes cholera—a skeletal figure of death carrying a handbag from “Asi In this cartoon, Boss Tweed welcomes cholera—a skeletal figure of death carrying a handbag from “Asi
Some ignition coils are electrically connected, called married (top figure), whereas others use ... Some ignition coils are electrically connected, called married (top figure), whereas others use ...
Finding the derivative using the power rule - Solutions Finding the derivative using the power rule - Solutions
Stripe pattern of pair-rule gene expression in a Drosophila embryo Stripe pattern of pair-rule gene expression in a Drosophila embryo
Video: Mechanism of enzyme action

For a complete list of videos, visit our video library