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Business, 17.12.2019 03:31 magicpuppydance

Consider the example of household refuse collection in minneapolis. assume that the marginal social cost (msc) of collecting and disposing of it is $0.15/lb. suppose that in 2011 there was a fee of $0.05/lb being charged and the quatity of refuse collected was 2.5lb/p/d. suppose that in 2012 the fee was $0.1/lb and the quantity of refuse collected was 2.00lb/p/d. now, the government is planning to increase the fee in 2014 to $0.12/lb.(a) assuming a linear demand function, calculate the change in total surplus from an increase in the fee from $0.10/lb to $0.12/lb.(b) what is the optimal fee that would maximize social surplus?

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