External costs are the result of the actions of O firms and consumers. O firms, consumers, and the government. O the government. O firms. O consumers.
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- Pricing with Market Power and Consumer SurplusPat’s Patriotic Tattoosis the only tattoo parlor in town.Pat tattoos only images of the American flag. Thereare 20 consumers whoare willing to buy a tattoo. Each consumeris interested in buying only onetattoo,butthey vary in their willingness to pay. One consumeris willing to pay $20for a tattoo; anotheris willingto pay $19; a third, $18, down to the consumerleast willing to pay whohasareservationprice of $1. The Effects of Price DiscriminationUse the exampleofPat’s Patriotic Tattoos to make some conclusions abouttheeffects of pricediscrimination.8. What happensto consumersurplusif a firm successfully price discriminates?9. What happenstothefirm’s profits if it successfully price discriminates?10. What happensto the quantity supplied by a successful price-discriminating monopoly firm compared with a nonprice-discriminating monopoly firm?11. How doesthe quantity supplied by a successful price-discriminating monopoly firm compare.with the…Market Structure and Market Power-End of Chapter Problem In October of 2004, British regulators were forced to suspend the license of a flu vaccine plant in Liverpool operated by the Chiron Corporation due to concerns over bacterial contamination. As a result, the market was less competitive and the remaining suppliers of the flu vaccine experienced an increase in their market power. Suppose the market for one of the remaining firms is represented by the following graph. a. Place point E on the remaining producer's profit maximizing price and output. Price ($ per dose) 44 49938388822822PING 40 36 30 26 20 18 16 14 12 10 8 6 4 2 0 0 2 4 E Marginal Revenue 6 8 10 12 14 16 18 20 Quantity (millions of doses) Marginal Cost Demand 22 24 26 28Figure 1. The graph depicts the market for plastic containers. Price 16- 14- 12- 10 8- 6 200 500 650 Social Cost Private Cost Demand Quantity Refer to Figure 1. In order to reach the social optimum, the government could O offer a subsidy of $8 per unit on the production of plastic containers. O impose a tax of $8 per unit on the production of plastic containers. O offer a subsidy of $4 per unit on the production of plastic containers. O impose a tax of $4 per unit on the production of plastic containers.
- In the area around a local university, a number of food vendors gather each lunchtime tosell food to university students who are tired of dorm food. The university and the townhave no license fees that apply to food vendors, preferring to let the market dictate howmany and which vendors show up.Many different cuisines are represented on the street corner, including a cart sponsoredby ABC selling X and Y . ABC sells a plate of either X or for Rs.5. The food is made inthe morning at nearby restaurant, when the kitchen is otherwise unoccupied. His crew ofthree, each of whom earns Rs.15 per hour, takes 2 hours to make the 100 meals requiredby ABC. In creating these meals, they use ingredients equal to Rs.100. ABC hires anotherworker to load her cart with food and sell it during the lunch hours. That worker costsRs.10 per hour and typically sells out the entire cart of 100 meals in 2 hours. The cart isrented for Rs. 100 per 5-day week.What market structure does this business most resemble?…Pece $100 $50 10 Orth Refer to the figure above. The price of a physician visit is $100. Individual A can only afford 5 doctor's visits. The society determines that A is under consuming doctor's visits and wants A to increase the visits to 10. What is the least amount of money the society subsidize A? The society subsidizes A less than $50 per visit. The society must subsidize A $50 per visit. The society must subsidize A $100 per visit. The society must subsidize A $75 per visit.Suppose the the demand for a product is given by Qd = 40 − 3P , andsupply by Qs = 5 + 2P Suppose that government places a tax on consumers of 10 per unit onproducers.(a) What will be the price and quantity with the tax?(b) How much will be the consumer be paying, including the tax, for each unit that the consumer purchases?(c) How much will the government be collecting in tax revenues?(d) What is the consumer surplus now that a tax has been placed on theproduct?(e) What is the producer surplus?(f) What is the deadweight loss?
- 1. What sort of product is alcohol in economic terms if the government wants torestrict consumption of it?2. Analyze the social costs of alcohol consumption.3. Analyze the factors that would determine the impact of a price increase on theconsumption of alcohol4. Is introducing a minimum price a better way of reducing consumption than trying tochange peoples’ attitudes?I live next door to an insomniac who plays jazz music every weekendlate at night. It is loud enough to keep me awake, but not loudenough to exceed the legal limit on noise pollution. Using Coasianbargaining I couldSelect one:a. Invest in soundproofing out of my own pocketb. Pay my neighbour not to play music at such timesc. Ask my neighbour to pay me to stay elsewhere at theweekendsd. Seek legal redress Please tell me which awnser is correct for this question thank youop Women's.. ogand v y Home ourses talog and Study Tools ntal Options lege Success Tips eer Success Tips ENDED FOR YOU ULTS vated by Focusing mes Feedback << C Logout CENGAGE MINDTAP Homework (Ch 08) 3. Relationship between tax revenues, deadweight loss, and demandelasticity PRICE (Dollars per windbreaker) 60 55 The government is considering levying a tax of $25 per unit on suppliers of either windbreakers or bucket hats. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for windbreakers is shown by Dw (on the first graph), and the demand for bucket hats is shown by DB (on the second graph). 50 Suppose the government taxes windbreakers. The following graph shows the annual supply and demand for this good. It also shows the supply curve (S + Tax) shifted up by the amount of the proposed tax ($25 per windbreaker). 45 On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax…
- gure 6-13 PRICE 16 S. 카 Demand 40 80 105 120 QUANTITY 2 12 96 160 Refer to Figure 6-13.Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the govermment. After paying the tax, Acme receives how much? Select one: O a. $9.00 Ob. $12.00 oco $10.50 Od, $8,00Four roommates a rc planning to sp<,nd the weekendin their dorm room watching old movies, and they arcdebating how many lo watch. Herc is their willingnessto pay for each film: a. Within the donn room, is the showing of a moviea public good? Why or why not?b. If it costs $8 to rent a movie, how many movies shouldthe roommates rent to maximiz.c total surplus 7c. H they choose the optimal number from part (b)and then split the cost of renting the moviesequally, how much surplus does each personobtain from watching the movies?d. Is there any way to split the cost lo ensure tha teveryone benefits? What practical problcms doesthis solution raise?e. Su pposc they agrcc in advance to choose the ef.ficient number and lo split the cost of the moviesequall}'- When Steven is asked his willingness topa}\ will he have an incentive to tell the truth 7 Ifso, why? If not, what will he be tempted to say?f. What docs this example teach you about the optimal provision of public goods?Market failure can be caused by Select one: O a. externalities and market power O b. government intervention and price controls O c. high prices and foreign competition O d. low consumer demand r4 ELASTICITY AND ITS Jump to..
