Determine the efficient quantity of fertilizer, Taxation

The above figure shows the market for fertilizer. When fertilizer is applied to lawns, it runs off into neighboring streams and ponds, killing fish and creating an external cost.

a. What is the equilibrium price and quantity of fertilizer in an unregulated, competitive market?

b. What is the efficient quantity of fertilizer?

c. Suppose government imposes a tax equal to the marginal external cost. What is the equilibrium price paid by consumers and the equilibrium quantity after implementation of the tax?

d. At the output level in part (c), how much is the tax?

e. How much tax revenue does government collect?

f. What is the deadweight loss borne by society if the externality is left uncorrected?

 

1327_Determine the Efficient Quantity of Fertilizer.png

Posted Date: 3/14/2013 1:17:25 AM | Location : United States







Related Discussions:- Determine the efficient quantity of fertilizer, Assignment Help, Ask Question on Determine the efficient quantity of fertilizer, Get Answer, Expert's Help, Determine the efficient quantity of fertilizer Discussions

Write discussion on Determine the efficient quantity of fertilizer
Your posts are moderated
Related Questions
Jack and Jill (two unrelated individuals who are citizens of the US) found an interesting script for a movie in 2010, and they decided to produce it in Nevada. It was a "low budge


a.  Which type of ripple marks would you expect to see on the bed of a river? Why? b.  Which type would you expect to find on the floor of a standing body of water? Why? c.

A fund that is managed by a trust company or a bank and deals with pooled collection of trust accounts. Collective investment funds combine together the assets of several individua

During February, 2010, Jacob's Jewels sells a broach for $428,000. The cost to the business of this necklace as $212,000, resulting in a gross profit of $216,000. The $428,000 sale


The will of B Dark, who died on 31 March of the previous income year, provides that after payments of debts and legacies the residue of the estate is to be held in trust and the in

Facts Valerie Lawson and Clara Norman are the sole equal shareholders in the corporation of Lawson And Norman Enterprises, Inc. The corporation, which is a retail office supplies

Amy R. and David T. Smith are married and live at 123 Main Street, Stafford, VA 22554. Dave is self-employed as a web developer and Amy is a commercial refrigeration sales represen

a) Using the above information you are to construct Fiona's Cash Flow Statement and then explain to her the importance of creating a surplus budget. b) The Net Worth Statement e