2. Suppose that the Marginal Abatement Cost function and the Marginal Damage function for an industry are given as follows: MAC = 80 -0.2e MD=0.3e For simplicity here, we are assuming that they are linear.
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- Suppose a tax is set at t’ in the figure. How many units of emissions are ABATED and is abatement achieved cost effectively? Suppose a regulation has just been implemented requiring that coal-fired power plants pay a tax of $80 on each unit of emissions (1 unit is 1 metric ton). Before the tax was imposed, a plant called Old River Power had an emissions level of 100 units. Given a marginal abatement cost function of 200 – 2E, under the tax policy what will Old River Power pay the regulator in emissions taxes?Suppose that the steel firm’s costs are shown below: Complete the table and determine the optimal output to be Price of steel is P175 per unit. Output (Q) TFC TVC TC MC TR MR Profit/Loss 0 500 0 1 500 50 2 500 90 3 500 140 4 500 200 5 500 270 6 500 350 7 500 450 8 500 600 9 500 800An Accra Chemical Factory discharges waste products into a river. These wastes kill many tilapia that are swimming upstream to spawn. While there will no doubt be other ecological damages from the chemical effluent, we wish to focus on those of the fishery. Let E be the tonnes of chemical effluent discharged per month. The equation for Marginal Damages (MD) is MD = 6E. The firm’s Marginal Abatement Cost (MAC) is given by MAC = 800 – 10E. a. Sketch the MD and MAC functions graphically on the same axes. b. Suppose E0 is the point where MAC = 0. Find the total damages (TD) to fishery by the factory per month.
- An Accra Chemical Factory discharges waste products into a river. These wastes kill many tilapia that are swimming upstream to spawn. While there will no doubt be other ecological damages from the chemical effluent, we wish to focus on those of the fishery. Let E be the tonnes of chemical effluent discharged per month. The equation for Marginal Damages (MD) is MD = 6E. The firm’s Marginal Abatement Cost (MAC) is given by MAC = 800 – 10E. a. Suppose the government invokes a liability law that requires polluters to compensate those damaged in an amount equal to the damages caused. Will the factory change its emission levels in response to the liability laws? Explain. b. If E* is the socially efficient level of emission, prove that reducing effluent to E* is a better strategy for the chemical factory than not reducing waster discharged and staying at E0.920 it bait of 289301 Sindspis ON SEU pilkupeni A30S AO +32 monulo2 An economist for a sporting goods company estimates the revenue and Cost functions for the production of a new snowboard. These Functions are R(x) = -x ² +10x and ((x) = 4x+5, respectively, where x is the number of Snowboard's produced in thousands. The average profit is defined by the function AP(x) = P(x), where pox) is the profit function & Determine the production levels that make AP(x) > 0 P-xdIn the market for foam fire retardant there is only one firm. The demand func-tion for the product is Q = 15,000 – 10P where Q is the annual sales quantity in tons and P is the price per ton. The firm’s total cost function (in dollars) is C = 1,400,000 + 300Q + 0.05Q2.a) How much foam fire retardant should this firm produce and sell in order to maximize its profit? What price should it charge?b) Compute the firm’s total profit.c) Suppose now that the firm faces a 20% increase in variable costs. Determine what impact this will have on the firm’s optimal choice.
- Explain why a change in a firm’s total fixed cost ofproduction will shift its average total cost curve,but not its marginal cost curve.A manufacturing plant that makes boomerangs has a fixed cost of $500/day and a variable cost of $40/hr for labor for the first 8 hours of production and $60/hr for each hour of production over 8 hours. Assume that the laborers are sent home after completing the required output and paid only for hours worked. If the output of boomerangs is 75/hr, what are the marginal and average costs per boomerang for producing: 450 boomerangs 525 boomerangs 675 boomerangs 750 boomerangs65. Cost Function Suppose the marginal-cost function for a manufacturer's product is given by de 100q - 3998q + 60 dq q- 40q + 1 where c is the total cost in dollars when q units are produced. (a) Determine the marginal cost when 40 units are produced. (b) If fixed costs are $10,000, find the total cost of producing 40 units. (c) Use the results of parts (a) and (b) and differentials to approximate the total cost of producing 42 units.
- Revenue and Cost The total weekly revenue functionfor a certain digital camera is given by R = 550xdollars, and the total weekly cost function for thecameras is C = 10,000 + 30x + x2dollars, where xis the number of cameras that are produced and sold.a. Find the profit function.b. Find the number of cameras that gives maximumprofit.c. Find the maximum possible profit.A toy manufacturer makes miniature trucks. The pricep(in dollar) and the demandx(numberof miniature trucks) are related by the equation 6000−600p=x. The total cost for the sametoy manufacturer to producexminiature trucks can be modeled byC(x) = 8x+ 450.(a) (10 points) Express the pricepin terms of the demandx. Find the revenueR(x) if themanufacturer sellsxminiature trucks in a month and find the domain of this function.(b) (10 points) Graph the cost and revenue functions on the same coordinate system for 0≤x≤6000.(c) (10 points) What is the minimum number of trucks the toy manufacturer must sell tobreak even?(d) (10 points) FindP′(300) and interpret the result.(e) (10 points) What is the exact profit from the sale of the 301stminiature truck?A company manufactures two products, X and Y, and the joint-cost function of these products is given by c=x+4y where c is the total cost of producing v units of X and y units of Y Determine the marginal cost with respect to y when x=36 and y=16 b. The production function for a company's product is O-20, where is the output that results from /units of labor and & units of capital. The unit cost of labor and capital are $225 and $150, respectively. The company wants the total cost of puts to be $270,000 Find the number of units of capital and labor that maximize production