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Business, 13.03.2020 19:04 aubrey1161

The market for paper in a particular region in the United States is characterized by the following demand and supply curves: Upper Q Subscript Upper D Baseline equals 145 comma 000 minus 2 comma 000 Upper PQD=145,000−2,000P and Upper Q Subscript Upper S Baseline equals 45 comma 000 plus 2 comma 000 Upper PQS=45,000+2,000P where QD is the quantity demanded in 100-pound lots, QS is the quantity supplied in 100-pound lots, and P is the price per 100-pound lot. Currently there is no attempt to regulate the dumping of effluent into streams and rivers by the paper mills. As a result, dumping is widespread. The marginal external cost (MEC) associated with the production of paper is given by the curve MEC equals 0.0006 Upper Q Subscript Upper SMEC=0.0006QS. a. Calculate the output and price of paper if it is produced under competitive conditions and no attempt is made to monitor or regulate the dumping of effluent. (Enter your responses rounded to two decimal places.) Without regulation, the price is $nothing per 100-pound lot, and the quantity is nothing 100-pound lots.

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