Marginal social benefit, Microeconomics

Consider the following information relating to the pulp market.

 

Demand

 

 

Supply

 

Output(tonnes/ day)

Marginal private benefit

Marginal social benefit

Output

(tonnes/day)

Marginal private cost

Marginal social cost

1

$140

 

1

$50

 

2

$120

 

2

$60

 

3

$100

 

3

$70

 

4

$80

 

4

$80

 

5

$60

 

5

$90

 

a. If this market considers only marginal private benefit and marginal private cost, how much pulp will be produced and at what price will it be sold?

b. Assume that pulp mills provide no external benefits and that each tonne of pulp generates $30 of external costs. Complete the table by entering the data for the columns headed 'Marginal social benefit' and 'Marginal social cost'.

c. What would be the socially optimal quantity of pulp produced and the socially optimal price at which will it be sold?

Posted Date: 2/21/2013 2:00:55 AM | Location : United States







Related Discussions:- Marginal social benefit, Assignment Help, Ask Question on Marginal social benefit, Get Answer, Expert's Help, Marginal social benefit Discussions

Write discussion on Marginal social benefit
Your posts are moderated
Related Questions
Describe stabilisation policies as by the International Monetary Fund (IMF). Define stabilisation policies as basically a list of demands set forward by the IMF to a debtor nat

IS INDIAN COMPANIES RUNNING A RISK BY NOT GIVING ATTENTION TO COST CUTTING?

When the curve that envelops the sweries of possible short-run average total cost curves is horizontal, this means that they are a. economies of scale, b. dieconomies of scale, co

Q. Explain General Equilibrium? General Equilibrium: Neoclassical economics presumes that production, employment, investment and income distribution are all determined by a con

if you were making the pricing decision for the gasoline company, would you cut, raise or leae the price unchanged

How does the indifference curve and budget line for a neutral good look like?

The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007 and into 2008. It originated from countries with highly sophisticated fin

what is the value in 10 years of 1 million dollars if interes rates are 4%?


Unions in a Competitive Market: Again, there a group of economists who will rely on the use of the competitive model to demonstrate the evils of unionization. The most regular anal