Use the following for any or all of Questions below. Consider the following model of the municipal solid waste (MSW) services market in the city of Houston.
MSC = 1.5 + 1.25Q MSB = 30 - 2.5Q
MEC = 0.75Q MEB = 0
where Q is the number of trash containers serviced per household per month.
-Assuming that Houston uses a flat fee pricing system for trash services, the equilibrium quantity of MSW services provided is

Question

Use the following for any or all of Questions   below. Consider the following model of the municipal solid waste (MSW) services market in the city of Houston.
MSC = 1.5 + 1.25Q MSB = 30 - 2.5Q
MEC = 0.75Q MEB = 0
where Q is the number of trash containers serviced per household per month.
-Assuming that Houston uses a flat fee pricing system for trash services, the equilibrium quantity of MSW services provided is

Quizplus · Accepted Answer

The equilibrium quantity is found where marginal social cost (MSC) equals marginal social benefit (MSB). Setting MSC = MSB, we solve 1.5 + 1.25Q = 30 - 2.5Q, which gives Q = 12.

Use the Following for Any or All of Questions