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Author Question: Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the ... (Read 123 times)

LCritchfi

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on: Jul 1, 2018
Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated 1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. The optimal amount of environmental damage would be
 a. 0
  b. 40
  c. 450
  d. 500

Question 2

Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated 1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. The tax that would have to exist to achieve the socially optimal level of production would be
 a. 0
  b. .50
  c. 1
  d. 2


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Perkypinki

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Reply #1 on: Jul 1, 2018
Answer to Question 1

b

Answer to Question 2

c


LCritchfi

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  • Posts: 519
Reply 2 on: Jul 1, 2018
YES! Correct, THANKS for helping me on my review

softEldritch

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  • Posts: 334
Reply 3 on: Yesterday
Great answer, keep it coming :)

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