Why does this price level not generate efficient situation

Assignment Help Finance Basics

Reference no: EM131357659

Assume that the demand for consuming a public good is given by P=20-q. Thet total cost for providing the good is 70. Assume also that the price for consuming the good is set at 5. Will there be enough revenues to cover the cost of proving the public good? Show in a figure and explain. Why does this price level not generate an efficient situation?

Reference no: EM131357659

Questions Cloud

Find the mad based on the two-year moving average : The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the anticipated mileage to be driven next year. Find the MAD based on the 2-year moving average

Religious tradition and the principles of democracy : What is the potential tension between any religious tradition and the principles of democracy?

Calculate the delta-theta and gamma : What is the delta of a nine-month at the money European call option on a non-dividend paying stock when the risk-free interest rate is 12% per annum, and the volatility of the stock is 18% per annum? Consider a call option on a non-dividend paying st..

Countries have value-added taxes : Many countries have value-added taxes that are paid by producers but are intended to fall on consumers. (They're basically just an indirect way of imposing sales taxes.)

Why does this price level not generate efficient situation : Assume also that the price for consuming the good is set at 5. Will there be enough revenues to cover the cost of proving the public good? Show in a figure and explain. Why does this price level not generate an efficient situation?

Discuss that changed your way of thinking about business : Reflect on your time in this module and share important milestones of your journey with your peers. What key concepts or ideas from this module will have the greatest influence on your future?

Strengths and weaknesses of a federal system : 1. Consider the ways in which the differences among state and federal laws on marijuana show both the strengths and weaknesses of a federal system. On this issue, do you think it's better to continue to allow states to set their own policies regar..

In which year can e commerce be said to have begun : In which year can e-commerce be said to have begun?- Unfair competitive advantages occur when___.- An example of a company using the content provider model is.

Plot the monthly sales data : The monthly sales for Yazici Batteries, Inc., were as follows: Plot the monthly sales data. Forecast January sales using each of the following: Naive method

User Account

All Pages