The supply and demand of sugar are given as Qs = 5P, Qd = 250- Pwhere Qs is tons supplied per year, P is the price per ton; Qd is tons demanded per year. Because of the pollution associated with production, marginal external costs of 40 are associated with each ton of sugar. Assuming that sugar is sold in a competitive market,What is the market price? How many tons of paper will be produced per year at that price?What is the efficient output of paper?What is the amount of total Pigouvian tax to achieve efficiency?What is the amount of total Pigouvian subsidy to achieve efficiency?Expert Answer 3) The supply and demand of sugar are given asQ = 5P, Q. = 250- Pwhere Q, is tons supplied per year, P is the price per ton; Qa is tons demanded per year. Because of thepollution associated with production, marginal external costs of 40 are associated with each ton ofsugar. Assuming that sugar is sold in a competitive market,a) What is the market price? How many tons of paper will be produced per year at that price?b) What is the efficient output of paper?c) What is the amount of total Pigouvian tax to achieve efficiency?d) What is the amount of total Pigouvian subsidy to achieve efficiency?

The supply and demand of sugar are given as Qs = 5P, Qd = 250- P where Qs is tons supplied per year, P is the price per ton; Qd is tons demanded per year. Because of the pollution associated with production, marginal external costs of 40 are associated with each ton of sugar. Assuming that sugar is sold in a competitive market, What is the market price? How many tons of paper will be produced per year at that price? What is the efficient output of paper? What is the amount of total Pigouvian tax to achieve efficiency? What is the amount of total Pigouvian subsidy to achieve efficiency?

The supply and demand of sugar are given as Qs = 5P, Qd = 250- P where Qs is tons supplied per year, P is the price per ton; Qd is tons demanded per year. Because of the pollution associated with production, marginal external costs of 40 are associated with each ton of sugar. Assuming that sugar is sold in a competitive market, What is the market price? How many tons of paper will be produced per year at that price? What is the efficient output of paper? What is the amount of total Pigouvian tax to achieve efficiency? What is the amount of total Pigouvian subsidy to achieve efficiency?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter12: Environmental Protection And Negative Externalities

Section: Chapter Questions

Problem 13SCQ: A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals...

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Expert Answer

3) The supply and demand of sugar are given as
Q = 5P, Q. = 250- P
where Q, is tons supplied per year, P is the price per ton; Qa is tons demanded per year. Because of the
pollution associated with production, marginal external costs of 40 are associated with each ton of
sugar. Assuming that sugar is sold in a competitive market,
a) What is the market price? How many tons of paper will be produced per year at that price?
b) What is the efficient output of paper?
c) What is the amount of total Pigouvian tax to achieve efficiency?
d) What is the amount of total Pigouvian subsidy to achieve efficiency?

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