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 90 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
Great answer, keep it coming :)

pratush dev

  • Member
  • Posts: 321
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

Human kidneys will clean about 1 million gallons of blood in an average lifetime.

Did you know?

In the ancient and medieval periods, dysentery killed about ? of all babies before they reach 12 months of age. The disease was transferred through contaminated drinking water, because there was no way to adequately dispose of sewage, which contaminated the water.

Did you know?

The human body's pharmacokinetics are quite varied. Our hair holds onto drugs longer than our urine, blood, or saliva. For example, alcohol can be detected in the hair for up to 90 days after it was consumed. The same is true for marijuana, cocaine, ecstasy, heroin, methamphetamine, and nicotine.

Did you know?

As many as 28% of hospitalized patients requiring mechanical ventilators to help them breathe (for more than 48 hours) will develop ventilator-associated pneumonia. Current therapy involves intravenous antibiotics, but new antibiotics that can be inhaled (and more directly treat the infection) are being developed.

Did you know?

Blood in the urine can be a sign of a kidney stone, glomerulonephritis, or other kidney problems.

Loss of Indian Lands, 1850–2010 Loss of Indian Lands, 1850–2010
Cost Savings with an EHR System Cost Savings with an EHR System
Joint movement of the fingers. Apply scissoring at the knuckles and figure-8s to the fingers to ... Joint movement of the fingers. Apply scissoring at the knuckles and figure-8s to the fingers to ...
To find the derivative use product rule To find the derivative use product rule
question in cost accounting question in cost accounting
Average Precipitation Acidities and the Effects of Acid Rain Average Precipitation Acidities and the Effects of Acid Rain
Video: Hypoglycemia Animation

For a complete list of videos, visit our video library