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Consider the following hypothetical model of the market for municipal solid waste (MSW) services in the town of Stonington, Connecticut:
MPB = 30 - 2.5Q MEB = 0MPC = 6 + 0.5Q MEC = 0.2Q
where Q is the number of trash containers per household per month.
a. Assume that Stonington uses a flat fee pricing system for trash services. Under this scenario, find the flat fee equilibrium quantity (QFF).
b. Compare the flat fee equilibrium to the competitive equilibrium (QC) and the efficient equilibrium (QE).
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The Day the Machines Went off
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