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timofeeve [1]
3 years ago
10

Two firms are ordered by the federal government to reduce their pollution levels. Firm A’s marginal costs associated with pollut

ion reduction is MC=150+3Q. Firm B’s marginal costs associated with pollution reduction is MC=10+9Q. The marginal benefit of pollution reduction is MB=250−4Q. a. What is the socially optimal level of each firm’s pollution reduction?
Compare the social efficiency of three possible outcomes: (1) require all firms to reduce pollution by the same amount; (2) charge a common tax per unit of pollution; or (3) require all firms to reduce pollution by the same amount, but allow pollution permits to be bought and sold.
Business
1 answer:
Paul [167]3 years ago
5 0

Answer:

Given marginal costs and benefit

for firm A: MC=150+3Q

for firm B: MC=10+9Q

Marginal Benefit: MB=250-4Q

Socially optimal level of each firms pollution reduction

MC=MB

150+3Q=250-4Q

7Q=100

Q=14.3

for firm B

10+9Q = 250-4Q

13Q=240

Q=18.5

HERE THE THREE SCENARIOS

1) iF BOTH FIRMS ARE REQUIRED TO REDUCE POLLUTION BY THE SAME AMOUNT THEN

Total surplus is equal to total benefit minus total cost. The total benefit is equal to the area under the marginal benefit curve

The same total reduction could be achieved by requiring each firm to reduce pollution by 25.6 units. This would be less efficient than the social optimum since it would be less costly for firm B to reduce pollution by more and for firm A to reduce pollution by less

2)A common tax could be used to achieve the social optimum. Setting a tax of 250-4Q would lead firm A (respectively, B) to reduce pollution to the point where MC A = 250-4Q (respectively MC B = 250-4Q). Solving gives Q A = 14.3 and Q B = 18.5

3)POLLUTION PERMITS LEADS TO PROBLEM OF INTERNALIZATION

Requiring both firms to reduce pollution by 25.6 units but allowing them to trade pollution permits can also be used to achieve the social optimum.

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Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the c
grin007 [14]

Answer:

Windhoek Mines, Ltd.

The net present value of the proposed mining project is:

=  ($232,950).

Explanation:

a) Data and Calculations:

Cost of new equipment and timbers = $500,000

Working capital required  = $100,000

Annual net cash receipts = $120,000

Cost to construct new roads in three years = $40,000

Salvage value of equipment in four years = $65,000

Estimated useful life of mine = 4 years

Working capital released in four years = $100,000

Required rate of return = 20%

                                                           Cash Flows   PV factor  Present Value

Cost of new equipment and timbers  $500,000      1               -$500,000

Working capital required                        100,000       1                 -100,000

Annual net cash receipts                       120,000     2.589            310,680

Cost to construct new roads in 3 years 40,000     0.579             -23,160

Salvage value of equipment in 4 years 65,000     0.482               31,330

Working capital released in 4 years     100,000     0.482              48,200

Net present value                                                                      ($232,950)

4 0
3 years ago
The purpose of safety stock is​ to: A. eliminate the possibility of a stockout. B. control the likelihood of a stockout due to v
NeX [460]
<h3>Hello there!</h3>

Your question asks what the purpose of a safety stock is.

<h3>Answer: B). control the likelihood of a stock out due to variable demand​ and/or lead time.</h3>

The reason why answer choice "B). control the likelihood of a stock out due to variable demand​ and/or lead time" is the correct answer because companies have safety stocks to control the chances of having a stock out.

Safety stocks are also known as a "reserve" for a company, in other words, stocks that a company doesn't touch. It's to ensure that companies don't go through a time where there's an increase in demand while there is a "delay" in production.

If a companies stock demand goes up, but then they can't "produce" the amount that is needed to meet the demand, then they will go through "stock out" and have to go through what is called "stock out costs."

Safety stocks are also known as a "rainy-day" stock, due to the fact that safety stocks are used when a company are not having a great day with the "demand" / "value" of their stocks. It's just to "ensure" / "keep the company safe" from a huge stock out.

<h3>I hope this helps!</h3><h3>Best regards, MasterInvestor</h3>
6 0
3 years ago
Your checkbook register shows these activities for the month.Old balance: $134.56Check 512 to Good Stuff for $32.19Deposit: $345
Dvinal [7]

Based on the various activities for the month that were reflected in your checkbook, your new balance would be $135.84.

<h3>What is the checkbook balance?</h3>

This can be found as:
= Opening balance + Deposits - Checks and withdrawals

Solving gives:

= 134.56 + 345.12 - 32.19 - 250 - 16.65 - 45

= $135.84

In conclusion, your new balance is $135.84.

Find out more on checkbook balances at brainly.com/question/3719189

#SPJ1

3 0
2 years ago
How have newspapers responded to their current financial situation?
iragen [17]

Answer:

The U.S. newspaper industry is suffering through what could be its worst financial crisis since the  Great Depression. Advertising revenues have plummeted due in part to the severe economic  downturn, while readership habits have changed as consumers turn to the Internet for free news  and information. Some major newspaper chains are burdened by heavy debt loads. Between 2008  and early 2010, eight major newspaper chains declared bankruptcy, several big city papers shut  down, and many laid off reporters and editors, imposed pay reductions, cut the size of the  physical newspaper, or turned to Web-only publication.

Explanation:

8 0
3 years ago
Tangerine Inc. is evaluating a capital project for investment. The initial cash outflow in Year 0 is $1,500 followed by cash inf
irina [24]

Answer:

Terminal value

= 500(1+0.12)3 + 500(1+0.12)2 + 500(1+0.12)1+ 500(1+0.12)0

= 500(1.12)3 + 500(1.12)2 + 500(1.12)1 + 500(1.12)0

= 702.464 + 627.2 + 560 + 500

= $2,389.66

The correct answer is E

Explanation:

Terminal value is a function of number of years cashflow for each year can be re-invested at the appropriate discount rate. The cashflow for year 1 can be re-invested for 3 years since the life of the project is 4 years. cashflow for year 2 can be re-invested for 2 years, cashflow for year 3 can be re-invested for 1 year and cashflow for year 4 can be re-invested for 0 year.

8 0
3 years ago
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