Microeconomics (Christopher T.S. Ragan) (z-lib.org)

Emission taxes can lead to efficient pollution abatement. As in Figure 17-3 , Firm A faces a lower marginal cost of pollution ab ...

prevents entrepreneurial shoppers in these situations from buying a large number of units at the special price and re-selling th ...

The above analysis applies to any level of an emissions tax. But what is the level at which an emissions tax should be set to ac ...

Another familiar example of hurdle pricing involves coupons for discounts at grocery stores. Many households receive grocery-sto ...

emissions tax attaches a price to any amount of pollution and so firms have an ongoing financial incentive to innovate so as to ...

The Consequences of Price Discrimination We can examine the consequences of price discrimination for firm profits, output, and c ...

Tradable Pollution Permits: “Cap and Trade” The third general policy approach to pollution reduction is often referred to as a s ...

Price Discrimination and Output Our second proposition relates to how price discrimination affects the level of output: A profit ...

Figure 17-5 The Efficiency of a Cap-and-Trade System amount of emissions consistent with the same total amount of pollution abat ...

being generated in the market and thus a more efficient outcome for society as a whole. For a monopolist that price discriminate ...

Note that at units of pollution abatement, the marginal costs for Firm B exceed the marginal costs for Firm A—pollution abatemen ...

By increasing the seller’s profits, price discrimination transfers income from buyers to sellers. When buyers are poor and selle ...

Figure 17-6 The Market for Permits in a Cap-and-Trade System —the government-mandated “cap” on pollution. Let this amount be is ...

Summary ...

marginal benefit of abatement. As the price of the permit increases, each firm says to itself: “At a higher price for permits, p ...

10.1 A Single-Price Monopolist LO 1, 2 Monopoly is a market structure in which an entire industry is supplied by a single firm. ...

Improvements in abatement technology will lead to a reduction in the demand for emissions permits and thus a reduction in their ...

10.2 Cartels and Monopoly Power LO 3 A group of firms may form a cartel by agreeing to restrict their joint output to the monopo ...

services generates at least some pollution. In choosing how much pollution to allow, society must recognize the tradeoff between ...

10.3 Price Discrimination LO 4 Any firm that faces a downward-sloping demand curve can increase its profits if it can price disc ...