A flat fee pricing system for MSW services
Use the following forany or all of Questions 11 through 13 below. Consider the following model of the municipal solid waste (MSW) services market in the city of Houston.
MSC = 1.5 + 1.25Q MSB = 30 – 2.5Q
MEC= 0.75Q MEB= 0
whereQ is the number of trash containers serviced per household per month.
a. ignores the positively sloped MPC of MSW services
b. causes an underallocation of resources to MSW services
c. means that demanders pay nothing for MSW services
d. provides an incentive for waste reduction
a. ignores the positively sloped MPC of MSW services
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