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.
-A flat fee pricing system for MSW services

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.
-A flat fee pricing system for MSW services

Quizplus · Accepted Answer

A flat fee pricing system ignores the positively sloped MPC (marginal private cost) of MSW (municipal solid waste) services, which means that the price does not rise as the quantity of trash serviced increases. This can lead to overconsumption of MSW services and a lack of incentive for households to reduce the amount of waste they produce.

Use the Following for Any or All of Questions