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ECON 1100 (14)
Lecture 14

ECON 1100 Lecture 14: econ-1100-lecture-notes-14
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Department
Economics
Course
ECON 1100
Professor
Huffman David
Semester
Spring

Description
04/18/17 : Tine Stahlberg Model E Pontine negative externalities Model : Stackwberg 2 firms a moves leaner burst ~ mores second bonnier is able To commit To its action leader lnverste demand . - P = 1000 Q = of of , +9 , ) = ( ( ) 2 160 . ccq , qy of FWM 1 1 leader ) Max =P ' q , AT q , -100 oq , - - - Max q At = qpoq iooq , , , , Fvvm 1 Takes into account BR Fn a Fuvm 8 : = 450 - q , Iq , Max = C 00 - - - - q , A Cio q , 1450 ) ) 9 100g fgq , , , - • A = 1000g - - 450 1009 , qp q , tfqp , 11000 - old = 1000 - 550 a = 0 2g , of , dg , * * a = 450 e 450 q , of , 1,14507=225 = Q 675 = P 325 A = 101 ) 250 At = 50 625 , , Nr • No • Pc . - - . . . - . Connon , 900 - - - - - 1 1 moiopoy - - . \ \ on( Q in • , I 1 vii. , , • • E gz } 300 900 qqo q . As or " gens coin min . - - - - •- - . - cannot i no,o°° . . - ,- - . \ \ ' ' Him . - - - - - - . . • ST I \ 1 . . y I . 4 qo )0°° 101,250 go 2) { °° A , De- Positive : an externality activity generates pontine externality When it benefits someone not involved in the activity Markets don't usually see positive externalities . So , production is low uw these mhts , unfairly 04/80/17 : Funal Outline : Bre-kdown P8 Rewew 2 questions new 2 out P- : cheval equilibrium multiple goods = a5 & D= 90 AD De 85 Dw • Af =15 hw =15 a 30 Each person stents W/ an endowment. Trade aftera point 30 In steaks go 5 • \ - g § Xt ... - a ± x I ¥ a n to t - is - so ¥3 - D - oo • - 25 30 Fireds drno steaks #m×€⇐ Fireds budget Pareto someone bett,r no-one worse lens setpmnementl benebowae trades of :utually live contract anne no way To make Paretcmipnonemewt hang) 14124 = MRSW ccie slopes of itunes one sam) V= In (D) + 2inch BARTERINU b.) ) JUST Fund contract www.i an allocations that satisfy Io 17k¥ = MRSW 2. Dw = 30 - beasvble Pf } options
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