The market for plasticans is perfectly competitive. Market Supply is given by Q=5P and Market Demand is given by Q=373-3P. Each extra unit of plastican produced creates a positive externality of $6. Implement the optimal Pigouvian tax/subsidy that implements the efficient outcome. What is the Consumer Surplus in the equilibrium with the tax/subsidy?

Q: A market with a negative externality has marginal benefits mb = 60 – 0.15q, marginal private costs…

A: Negative externality refers to the external damage to the third party which is not directly involved…

Q: True or False? In the presence of a positive externality, a Pigouvian subsidy results in less…

A: Positive externality refers to the situation when the action of an individual contributes positively…

Q: Which of the following statements is TRUE?I. A Pigouvian subsidy reduces the market price to…

A: Both I and II are true. 3rd statement is not true as deadweight loss can also occur is positive…

Q: The production of good x creates a negative externality on firms producing good y. Total costs are…

A: Given: TC (x) = x2  px = 90 c(x,y)=y2 + 20x py = 20

Q: Explain this statement in detail with graphs. "With externalities, private market outcomes do not…

A: Externalities arises when actions of one person effects actions of other people. In other words , It…

Q: suppose that scientists discover that this particular product has a significant Positive…

A: Dead Weight Loss: A deadweight loss could be a social group price incurred as a result of market…

Q: Imagine a market where there is a positive externality in production. The private (and social)…

A: Given:

Q: The market for used phones is perfectly competitive without externalities. Market demand is Q=235-2P…

A: perfectly competitive without externalities: This means that people only make decisions about…

Q: Market Supply is given by P=2Q and Market Demand is given by P=189-2Q. Each extra produced creates a…

A: We are going to find the New equilibrium under Pigouvian taxes and effective consumer surplus to…

Q: The optimal level of output can be achieved by levying a tax on a company producing a negative…

A: Negative externalities are negative side effects of economic activities that are not captured by the…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=3P and Market Demand…

A: Negative externality is negative spillover effects on third party or on society.

Q: Which of the following statements is (are) TRUE? I. In the face of a positive externality, a…

A: Externality is one of the economic concepts that is used to explain the market situation when the…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=3P and Market Demand…

A: Answer in Step 2

Q: True or False:  In a market with a positive externality, a Pigouvian subsidy maximizes total…

A: The effect of a Pigovian Subsidy can be explained in a market with positive externality as follows :…

Q: The market for used phones is perfectly competitive without externalities. Market demand is Q=378-2P…

A: Given:  Marked Demand:Q=378-2PMarket Supply: P=2Q+5-2Q=5-P2Q=5+PQ=52+P2Q=2.5 +0.5PNow, Equilibrium…

Q: a) it is better than efficient b) the price of the product is too low c) the price of the product is…

A: The positive externalities are positive side effects of consumption or production that are not…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=9P and Market Demand…

A: The total production process of a firm is an amalgamation of various costs, the optimum quantity…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=2P and Market Demand…

A: Perfect competitive market where large numbers of buyers and sellers exchange homogeneous product.…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=5P and Market Demand…

A: Supply function Q=5P P = Q/5 MPC = Q/5 , where MPC = Marginal private costs Market Demand is given…

Q: ced i

A: Given : Supply : Q=4P Demand : Q=296-2P Negative Externality = $5 (assumed)

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=2P and Market Demand…

A: Supply is the quantity that a producer or seller manufacture to sell in the market for consumption…

Q: Consider Product NE, which has a negative externality associated with its production and use ( i.e.,…

A: In the case of a negative externality, the supply curve cannot account for the total cost of the…

Q: f both demand and supply decrease, there will be a decrease in the equilibrium output, but the…

A: Negative externalities: Negative externalities happen when the item as well as utilization of a…

Q: Consider a competitive market with negative externalities and a firm in this market. To force this…

A: In the perfectly competitive market, when negative externality arises, market outcome will be…

Q: If there is a negative production externality affecting a market (where the firm mistakenly tries to…

A: In a market with negative production externality, it can be said that the production of the good…

Q: The market for pencils perfectly competitive without externalities. Market demand is Q=364-2P and…

A: Demand: - Demand is the relationship between the quantity demanded and the price of a good. There is…

Q: shows the supply and demand conditions for a firm that will play trumpets on the streets when…

A:

Q: Suppose market demand is given by P= 200- Q, and market supply is given by P= Q. Suppose %3D there…

A: Negative externality is a cost bear by producer due to any third party economic transaction also…

Q: Question 11 In any Pigouvian taxation, the tax on the producer (that causes negative production…

A: Tax is the compulsory payment that is imposed by the government. When taxes are imposed on the goods…

Q: Which of the following is NOT a possible way of solving an externality problem of electricity…

A: A negative externality refers to negative spillover effects on the third party or on the society.

Q: National Public Radio (NPR) is a public good. The cost (supply) of each "unit" of NPR is P=2.…

A: NPR is a public good Cost;  P = 2 per unit Derek's Valuation/Demand; PD = 10-Q Kim's…

Q: All of the following are ways to cope with negative externalities blic choice ligatory controls…

A: ‘Externality’ is a cost or benefit that a person or a community receives but they have no control…

Q: Market (inverse) demand for measles vaccine is given by P= 100-20. Market (inverse) supply for…

A: Given information is, Market (inverse) demand for measles vaccine is given by :- P=100−2Q. Market…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=6P and Market Demand…

A: GIVEN   The market for plasticans is perfectly competitive. Market Supply is given by Q = 6P…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=3P and Market Demand…

A: Surplus is based on economic theory of marginal utility which defines additional satisfaction or…

Q: For the following alternatives, argue which is true, false or uncertain according to the following…

A: An externality occurs when the action of one affects the others in the society without their…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=7P and Market Demand…

A: Market Supply is given by,Q=7Pand Market Demand is given by,Q=455-2Pand, negative…

Q: it is microeconomics    If a firm does not pay for an external cost, who does? Why might there be…

A: If a firm does not pay for an external cost, who does? Answer External costs are the cost, which is…

Q: The demand and supply functions of a product is given as P = 200- 0.5Q and P = 100+ 0.5Q,…

A: *Hi there  as you have posted multiple questions , following our guidelines we can only solve the…

Q: Figure 5-1 shows a market with an externality. The current market equilibrium output of Q1 is not…

A: Externality refers to positive or negative effect of production or consumption of good on third…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=6P and Market Demand…

A: Market equilibrium is where quantity demanded equals quantity supplied The total cost of externality…

Q: Which of the following statements about a market that is affected by a positive externality is…

A: Market failure: It refers to the situation in which the destruction of goods and services is…

Q: Assume that the marginal benehts to society of higher education are greater than the marginal…

A: A subsidy should be given to the consumer equal to the marginal external cost to achieve social…

Q: Each of the following is true of a positive externality except Internalizing the externality causes…

A: The false statement or exception is “the quantity after a corrective subsidy is less than the…