The Rocky Mashed Potato Factory produces output at C= Q^2 (marginal costs 2Q), where Q is the quantity of mashed potatoes produced, in tons. In addition, 2 units of emissions are produced for each ton of mashed potatoes (E = 2Q). Pollution damage is $2 for each unit of emissions, which leads the government to charge $2 per unit of emissions as a Pigovian fee. The firm’s output sells competitively for $10 per ton.
a. How many tons of mashed potatoes will the Rocky Mashed Potato Factory produce? How much does it pay in emission fees? What are its profits?
b. A device is invented that would reduce the firm’s emissions to one unit for each town of output (e = Q). How much would the firm be willing to pay for such a device?
c. How would your answer to part (b) change if there were no government regulation of pollution emissions? What does this lead you to say about the relationship between government regulation and the market for pollution abatement equipment?
Introducing our Online Essay Writing Services Agency, where you can confidently place orders for a wide range of academic assignments. Our reputable homework writing company specializes in crafting essays, term papers, research papers, capstone projects, movie reviews, presentations, annotated bibliographies, reaction papers, research proposals, discussions, and various other assignments. Rest assured, our content is guaranteed to be 100% original, as every piece is meticulously written from scratch. Say goodbye to concerns about plagiarism and trust us to deliver authentic and high-quality work.
WRITE THIS ESSAY FOR ME
Tell us about your assignment and we will find the best writer for your paper.
Get Help Now!WRITE MY ESSAY NOW
