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Unformatted text preview: to cut back its snippet production to 40? How much is the rm willing to accept? Is a bargain struck? What is the new social gain? 2. Use the graph from Problem 1. Assume theres no possibility of bargaining and that it would cost the neighbors $3 to move away. a) If the rm faces no legal penalty for polluting, will the neighbors move? How many snippets are produced? What is the social gain? b) If the rm must reimburse the neighbors for all pollution damage, will the neigh-bors move? How many snippets are produced? What is the social gain? 3. A competitive rm faces the following total cost curve: Q TC 1 8 2 10 3 14 4 20 5 28 6 38 7 50 Suppose the price of the item is $6. Derive the rms marginal cost and marginal revenue tables. At what quantity is prot maximized?...
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This note was uploaded on 06/09/2008 for the course ECO 108 taught by Professor Landburg during the Fall '06 term at Rochester.
- Fall '06