What is the equilibrium price and quantity of CFC-11 before the excise tax?
Consider the following market for CFC-11, a known ozone-depleting substance:
Demand: Q= 20 – 1.5P Supply: Q= 5+0.5P
whereP is price per pound.
Assume the governmental authority imposes a $5 per pound excise
tax on CFC-11, which shifts the supply function to Q’ = 2.5 +0.5P.Use this information for any or all of the next three questions below.
a. P = $8.75; Q = 5 c. P = $6.875; Q = 8.75
b. P = $7.5; Q = 8.75 d. none of the above
b. P = $7.5; Q = 8.75
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In a Nash equilibrium, all players select non-dominant strategies
Indicate whether the statement is true or false
If you must determine the long-run equilibrium output of a perfectly competitive firm and you are permitted to see only one curve, which of the following curves is most helpful?
a. demand b. marginal cost c. average cost d. average fixed cost
What will a price ceiling that is non-binding do?
a) It will cause a surplus in the market. b) It will cause a shortage in the market. c) It will cause the market to be less efficient. d) It will have no effect on the market price.
Related to the Economics in Practice on page 154: According to the Economics in Practice feature, the managerial part of the United States Technical Assistance and Productivity Program
A. generated only small positive effects in both the short and long run. B. generated large and long-lasting positive effects. C. generated large short-term effects but barely any long-lasting effects. D. was not effective in either the long run or the short run.