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 124 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
YES! Correct, THANKS for helping me on my review

softEldritch

  • Member
  • Posts: 334
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Critical care patients are twice as likely to receive the wrong medication. Of these errors, 20% are life-threatening, and 42% require additional life-sustaining treatments.

Did you know?

The first oncogene was discovered in 1970 and was termed SRC (pronounced "SARK").

Did you know?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Did you know?

A serious new warning has been established for pregnant women against taking ACE inhibitors during pregnancy. In the study, the risk of major birth defects in children whose mothers took ACE inhibitors during the first trimester was nearly three times higher than in children whose mothers didn't take ACE inhibitors. Physicians can prescribe alternative medications for pregnant women who have symptoms of high blood pressure.

Did you know?

Approximately one in three babies in the United States is now delivered by cesarean section. The number of cesarean sections in the United States has risen 46% since 1996.

Terrestrial plants and animals can be characterized by analogous pathways for water gain and loss. Terrestrial plants and animals can be characterized by analogous pathways for water gain and loss.
Cost Savings with an EHR System Cost Savings with an EHR System
The cube of insulating material shown in the figure has one corner at the origin. Each side of ... The cube of insulating material shown in the figure has one corner at the origin. Each side of ...
The drum shown in the figure has a radius of 0.40 m and a moment of inertia of 2.3 kg m2about ... The drum shown in the figure has a radius of 0.40 m and a moment of inertia of 2.3 kg m2about ...
A random sample of 87 airline pilots recruited by an airline service had an average yearly ... A random sample of 87 airline pilots recruited by an airline service had an average yearly ...
If the frequency equals 60 Hz in Figure 10-1, what is the value of capacitance? If the frequency equals 60 Hz in Figure 10-1, what is the value of capacitance?
Video: Simple Diffusion - gases and nonpolar compounds transport

For a complete list of videos, visit our video library