Assume reductions in the amount of ground level ozone shift the marginal cost of producing alfalfa from MC₁ = 45 + 2Q_S to MC₂ = 45 + 0.5Q_S.Use the producer surplus to estimate the maximum amount alfalfa producers would be willing to pay for this improvement in the air quality if the market price of alfalfa is $60/unit of output.

Question

Quizplus · Accepted Answer

The Answer of Assume reductions in the amount of ground level ozone shift the marginal cost of producing alfalfa from MC₁ = 45 + 2Q_S to MC₂ = 45 + 0.5Q_S.Use the producer surplus to estimate the maximum amount alfalfa producers would be willing to pay for this improvement in the air quality if the market price of alfalfa is $60/unit of output.

Assume Reductions in the Amount of Ground Level Ozone Shift