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
discuss the law of variable proportion with the help of isoquants

Player 2   C B A 1,2 3,2 B 2,3 a, b         Player 1

Mercantilism:It is an economic theory from pre-capitalist times which held that a country's prosperity depended on its ability to produce large and persistent surpluses in its fore

Suppose taht two people, Michell andJames each live alone in an isolated region. They each have the same resources available, and they grow potatoes and raise chickens. If Michelle

Consumers purchase a house or multiple dwellings for a number of reasons. But what is the rationale behind their decision to buy and/or sell a house, flat or apartment? Do consumer

meaning, scope, nature

Regardless of the market structure, oligopolist and the monopolist maximize their TR when MR=0. Do you agree?


(1) The demand curve for oranges is given by the equation P = 5 – Q/200. The supply curve is given by P = Q/800. Q is measured in oranges per day and price is measured in dollars p

how to draw a table of the demand and supply scdule