Confused and unsure how to solve properly No RecyclingRecycling2,3001,5001,6002,800Total economic profit is highest when the recycling production method isWhen the research lab uses the recycling method, the campground earns$2,800 $1,600 = $1,200 more per week than it does with no recycling. Therefore, the campgroundshould be willing to pay up to $1,200 per week for the research lab to recycle water. However, therecycling method decreases the research lab's economic profit by $2,300 - $1,500 = $800 per week.Therefore, the research lab should be willing to use the recycling method if it is compensated withat least $800 per week.Suppose the campground has the property rights to the lake. That is, the campground has theright to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, theresearch lab willthe recycling method and will pay the campgroundper week.Now, suppose the research lab has the property rights to the lake, including the right to pollute it.In this case, assuming the two firms can bargain at no cost, the research lab willtherecycling method, and the campground will pay the research labper week.The research lab will make the most economic profit whenTrueFalseTrue or False: The research lab will use the recycling method, regardless of who has the propertyrights. Consider a lake found in the town of Center Barnstead, and then answer the questions that follow.The town has a campground whosevisitors use the lake for recreation. Thetown also has a research lab that dumpsindustrial waste into the lake. Thispollutes the lake and makes it a lessdesirable vacation destination. That is,the research lab's waste decreases thecampground's economic profit.Suppose that the research lab could use a different production method that involves recyclingwater. This would reduce the pollution in the lake to levels safe for recreation, and the campgroundwould no longer be affected. If the research lab uses the recycling method, then the research lab'seconomic profit is $1,500 per week, and the campground's economic profit is $2,800 per week. Ifthe research lab does not use the recycling method, then the research lab's economic profit is$2,300 per week, and the campground's economic profit is $1,600 per week. These figures aresummarized in the following table.Complete the following table by computing the total profit (the research lab's economic profit andthe campground's economic profit combined) with and without recycling.ProfitResearch Lab Campground(Dollars)STT2,3001,500ActionNo RecyclingRecycling(Dollars)dan1,6002,800Total(Dollars)Total economic profit is highest when the recycling production method isWhen the research lab uses the recycling method, the campground earns

Coarse theorem states that an efficient outcome can be achieved by negotiating between two parties…

Lecycling cycling 2,300 1,500 1,600 2,800 economic profit is highest when the recycling production method is the research lab uses the recycling method, the campground earns - $1,600 = $1,200 more per week than it does with no recycling. Therefore, the campground d be willing to pay up to $1,200 per week for the research lab to recycle water. However, the ing method decreases the research lab's economic profit by $2,300 - $1,500 $800 per week. fore, the research lab should be willing to use the recycling method if it is compensated with st $800 per week. ose the campground has the property rights to the lake. That is, the campground has the to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the rch lab will the recycling method and will pay the campground per week. suppose the research lab has the property rights to the lake, including the right to pollute it. s case, assuming the two firms can bargain at no cost, the research lab will the ing method, and the campground will pay the research lab per week. esearch lab will make the most economic profit when True False or False: The research lab will use the recycling method, regardless of who has the property

Lecycling cycling 2,300 1,500 1,600 2,800 economic profit is highest when the recycling production method is the research lab uses the recycling method, the campground earns - $1,600 = $1,200 more per week than it does with no recycling. Therefore, the campground d be willing to pay up to $1,200 per week for the research lab to recycle water. However, the ing method decreases the research lab's economic profit by $2,300 - $1,500 $800 per week. fore, the research lab should be willing to use the recycling method if it is compensated with st $800 per week. ose the campground has the property rights to the lake. That is, the campground has the to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the rch lab will the recycling method and will pay the campground per week. suppose the research lab has the property rights to the lake, including the right to pollute it. s case, assuming the two firms can bargain at no cost, the research lab will the ing method, and the campground will pay the research lab per week. esearch lab will make the most economic profit when True False or False: The research lab will use the recycling method, regardless of who has the property

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter24: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 9CQ

See similar textbooks

Similar questions

Suppose that the fish processor could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the boat tour would no longer be affected. If the fish processor uses the recycling method, then the fish processor's economic profit is $1,300 per week, and the boat tour's economic profit is $1,900 per week. If the fish processor does not use the recycling method, then the fish processor's economic profit is $1,600 per week, and the boat tour's economic profit is $1,100 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the fish processor's economic profit and the boat tour's economic profit combined) with and without recycling. Action Profit Fish Processor Boat Tour Total (Dollars) (Dollars) (Dollars) No Recycling 1,600 1,100 Recycling 1,300 1,900 Total economic profit is highest…
Imagine that the Australian national rugby union has exclusive rights to organize the games played by the national team. Rugby AU decides that the next match, between the Wallabies and the All Blacks, will be hosted at the Marvel Stadium in Melbourne. Rugby AU has no fixed costs for organizing the game, but it must pay a marginalcost MC of $20 per seat to the owners of the Marvel Stadium. Two types of tickets will be sold or the game: concession and full fare. Based on any official document that attests to their age, children and pensioners qualify to purchase concession tickets that offer a discounted price; everyone else pays the full fare. The demand for full-fare tickets is QF(P) = 120 – 2P. The demand for concession tickets is QC(P) = 80 – 2P. Q)Suppose that Rugby AU becomes unable to verify the age of its customers; thus, the formerly distinct full fare and concessional ticket markets must be combined/merged in one single market. First, write the equation of the merged demand and…
A study of ethanol as a transportation fuel reveals that the competitive equilibrium is expected to be at a price of $4 per gallon and a consumption rate of 100 million gallons/day. For a production rate of 10 million gallons/day, the marginal cost is found to be $1 per gallon. Also, a a price of $10 per gallon the demand is 10 million gallons/day. Answer the following questions for this system. 1. Determine the equations for the demand and marginal cost lines. 2. Calculate the consumer and producer surplus for the market equilibrium. 3. It was discovered later that the above information ignored a government subsidy of 50 cents per gallon. How will the demand and marginal cost lines, and the competitive equilibrium, change if this subsidy is removed?
Rubidoux Adventures supplies professional guides for climbs up Mt. Rubidoux. The company has two guides, Rocky and Cliff. Because Mt. Rubidoux is a pretty easy climb, the company has only two customers, Ken and Lucy. The table below shows the guides' marginal costs for each climb as well as the customers' MWTP for guided climbs. Use this table to answer the questions that follow. Assume that only whole climbs are available. MCRocky (S/climb) Climbs MCClff MWTPKen MWTPLucy (S/climb) (S/climb) (S/climb) 1 4 1 24 22 2 6. 23 21 3 7 4. 21 18 4 11 7 19 16 13 9 17 11 16 12 14 8 7 19 14 11 6 21 16 9 3 What is Ken's reservation price? O a. 22 Ob. 23 OC 24 O d. 21
A large share of the world supply of cocoa beans comes from Ghana and Ivory Coast. Suppose that the marginal cost of producing cocoa beans is constant at GHC1000 per bag and the demand for cocoa beans is described by the following schedule. Price (GHC) Quantity (bags) 5000 6000 7000 8000 9000 10000 11000 12000 8000 7000 6000 5000 4000 3000 2000 1000 a) If there were many suppliers of cocoa beans, what would be the price and quantity? b) If there were only one supplier of cocoa, what would be the price and quantity? c) At a meeting in October 2017 in Accra, the leaders of the two leading producers of cocoa beans discussed the possibility of cooperating to boost the price of cocoa. If Ghana and Ivory Coast formed a cartel, what would be the price and quantity? If the countries split the market evenly, what would be Ghana's production and profit? f) What would happen to Ghana's profit if it increased its production by 1000 cocoa while Ivory Coast stuck to the cartel agreement? g) Use your…
How do firms that have a monopoly and firms under perfect competition make similarproduction choices?
Table 2 Imagine a small town in which only two residents, Lisa and Mark, own wells th Time left 1:57 drinking water. Each week Lisa and Mark work together to decide how many gallons of water to pump. They bring the water to town and sell it at whatever price the market will bear. To keep things simple, suppose that Lisa and Mark can pump as much water as they want without cost so that the marginal cost of water equals zero. The weekly town demand schedule and total revenue schedule for water is shown in the table below: Quantity (in gallons) 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 Price Select one: O a. 0 O b. 1,200 O c. 600 O d. 900 $120 110 100 90 80 70 60 50 40 30 20 10 0 Total Revenue (and Total Profit) $0 11,000 20,000 27,000 32,000 35,000 36,000 35,000 32,000 27,000 20,000 11,000 0 Refer to Table 2. If the market for water were perfectly competitive instead of monopolistic, how many gallo of water would be produced and sold?
$6.00 $4.50 МС АТC $3.50 $3.00 $2.50 $2.00 $1.00 MR 10 20 30 40 50 60 70 80 90 Quantity If the government regulates the monopolist to produce the allocatively efficient quantity and provides a subsidy sufficient to maintain zero econornic profits for the firm, what price would the government set and what level of output would the firm produce? $1.00 and 50 в $2.00 and 80 $3.00 and 50 D $3.50 and 50 E $4.50 and 30 P Type here to search 21/04 8 Price, Cost
Table 2 Imagine a small town in which only two residents, Lisa and Mark, own wells that produce sa drinking water. Each week Lisa and Mark work together to decide how many gallons of water to pump. They bring the water to town and sell it at whatever price the Time left 1:5 bear. To keep things simple, suppose that Lisa and Mark can pump as much water as they want without cost so that the marginal cost of water equals zero. The weekly town demand schedule and total revenue schedule for water is shown in the table below: Quantity (in gallons) 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 Select one: Price O a. $60 O b. $20 O c. $40 O d. $70 $120 110 100 90 80 70 60 50 40 30 20 10 0 Refer to Table 2. If Lisa and Mark operate as a profit-maximizing monopoly in the market for water, what price will they charge? Total Revenue (and Total Profit) $0 11,000 20,000 27,000 32,000 35,000 36,000 35,000 32,000 27,000 20,000 11,000 0
Assume integer quantities. The firm is a monopoly. The table below shows the demand schedule it faces, as well as its marginal cost of production. The production of the good creates a marginal external benefit equal to $19. 1 3 5 MWTP $35 $29 $24 $18 $11 $6 $1 MC $2.50 $3.50 $6.50 $8.50 $13.50 If the monopoly engages in perfect first-degree price discrimination, what is the marginal $10.50 $12.50 revenue of unit number 2? Round to two decimal places and do not enter the currency symbol. If your answer is $1.125, enter 1.13.
Coke and Pepsi dominate the cola market. Suppose that the marginal cost of making cola is $2. Assume also that the demand for cola is given by the following table: Price $8 7 6 S43N 5 2 1 Quantity 5 cans 6 7 8 9 10 11 12 If Coke was the only supplier of cola, how many bottles of cola would be sold? Type your answer...
Explain natural monopoly in case of public production of private goods.