Marginal social benefit, Microeconomics

Assignment Help:

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?


Related Discussions:- Marginal social benefit

Materials requirements calculations - mrp system, Materials Requirements Ca...

Materials Requirements Calculations - MRP System MRP is a computer-based 'engine' which carries out calculations in order to determine:  What is needed, and When i

Teacher-wellston high school, When the curve that envelops the sweries of p...

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

Describe pay-as-you-go pension plan, Q. Describe pay-as-you-go pension plan...

Q. Describe pay-as-you-go pension plan? Pay-As-You-Go Pension: A pay-as-you-go pension plan sponsor basically just pays for pension benefits to retired plan members out of its

Concept of diminishing returns, in aid of a diagram explain the concept of ...

in aid of a diagram explain the concept of diminishing returns in production

Organization becoming too large to effectively manage, Economies of scale a...

Economies of scale are advantages obtained from a company becoming large and diseconomies of scale are additional costs inflicted because a firm has become very large.  The causes

Vectors, given that a=(4;2) and b=(5;11)determine the value of x in the fol...

given that a=(4;2) and b=(5;11)determine the value of x in the following equation b=3x-1/2a

Examples of oligopolies abound, The U.S. automobile industry, the soft-drin...

The U.S. automobile industry, the soft-drink industry, the brewing industry, segments of the fast-food industry, and airplane manufacturers. Oligopoly will usually produce less tha

#consumer behaviour, using the marginal utility approach, discuss how econo...

using the marginal utility approach, discuss how economic theory explains the optimum pattern of consumption for an individual consumer. consider how far this analysis can explain

Increase probability or increase winnings, Would a risk loving person prefe...

Would a risk loving person prefer an increase in the chance of winning the lottery by 20% or an increase in the jackpot of 20%

State the keynesian theory of employment, Q. State the Keynesian Theory of ...

Q. State the Keynesian Theory of employment? Under employment Theory, Govt interference Aggregate Demand- Aggregate supply- Effective demand, Income and employment consumption

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd