Midterm-ExCrdt-Spring2014

4 the demand for paper is q 15 p2 where p is measured

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Unformatted text preview: e demand for paper is Q = 15− P/2 , where P is measured in $ per ream and Q is measured in reams. It costs $6 to produce each ream of paper (what is the marginal cost equation?). Producing paper also generates water pollution externalities due to the chemical processing. The cost of the pollution is as follows: The first ream causes $1 damage and each additional ream imposes $1 more pollution costs than the previous ream. A) Plot the MB, MC, and SMC. Label the axes, intercepts and the lines you add. 21...
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This document was uploaded on 03/25/2014 for the course ECON 328 at Wisconsin Milwaukee.

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