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<DIV>(Second Try - First Answer Wasn'tSufficient)<BR></DIV><BR>
<DIV>Explain the difference between fixed-productiontechnology and variable-production technology. Should thegovernment set a goal of reducing the marginal social cost ofpollution to zero in industries with fixed-production technology?Should they do so in industries with variable technology?</DIV>

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manhokwe tawanda
manhokwe tawandaLv10
28 Sep 2019

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Related questions

Under what circumstances, and why, would the government be opposedto a merger of two firms? How does the Justice Department decidewhich mergers to challenge?
Explain the difference between fixed-production technology andvariable-production technology. Should the government set a goal ofreducing the marginal social cost of pollution to zero inindustries with fixed-production technology? Should they do so inindustries with variable technology?
What is the
1. Under what circumstances, and why, would the government beopposed to a merger of two firms? How does the Justice Departmentdecide which mergers to challenge?

2. Explain the difference between fixed-production technology andvariable-production technology. Should the government set a goal ofreducing the marginal social cost of pollution to zero inindustries with fixed-production technology? Should they do so inindustries with variable technology?

3. What is the “regulatory dilemma”? That is, what trade-offs doregulators have to consider when deciding how to control a naturalmonopoly?

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1. Suppose marginal cost of abating X units of pollution is given by: MC(X) = 2X and marginal benefits are MB(X) = 16-2x when X<= 3 and 10 when X > 3. Current pollution = 6.

a.) What is the optimal level of pollution abatement, X*? How much pollution is there when X = X*?

COMMENT: For this part I set 2x = 16-2x and got 4 but 4>3 so I don't think that's a valid solution. So I set 2x = 10 when X >3 and got 5, what's the correct approach?

b.) What are total costs, marginal costs, and total net benefits at X = X*?

c.) What is the total net benefit of making (and encofring) a rule that bans pollution completely? What is the marginal benefit from removing the last little bit of pollution (i.e. the marginal benefit around the point X = Xmax)

d.) Suppose air pollution abatement in the U.S. is currently X* (that is, we currently have the ideal amount of air pollution given the costs and benefits of abatement). Now suppose that an effective vaccine against asthma is invented and given to everyone. Would this increase or decrease X*? Come up with your own example of a new technology that would move X* in the opposite direction and explain why it would have this effect.

Poster below me asked for irrelevant information that is not needed to answer the question.

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