If there is a unit tax,then the new marginal private cost function is MC=10+Q+tQ. If we now set this new marginal cost function equal to the price of 70 and substitute in 30 for the quantity,wecan solve fort 10+Q+tQ=70 Q(1+t=60 1+t2 t=l The tax should be $1 per unit outpu Note that with the taxequal to 1,the new private cost function is the same as the marginal social cost function. Calculate the output and price of dry cleaning if it is produced under monopolistic conditions without regulation. The monopolist will set marginal cost equal to marginal revenue.Recall that the marginal revenue curve has a slope that is twice the slope of the demand curve so yMR=100-2Q=MC=10+Q. Therefore.Q=30 and P=70. e. Determine the tax that would result in a monopolistic market producing the socially efficient output. The tax is equal since the monopolist will produce at the socially efficient output in this case Assuming that no attempt is made to monitor or regulate the pollution, which market structure yields higher social welfare?Discuss. In this case it is actually the monopolist that yields the higher level of social welfare over the competitive market since the monopolist's profit maximizing priceand quantity are the same as the socially efficient solution.Since a monopolist tends to produce less output than the competitive it may end up producing closer to thesocial equilibrium when a negativeextemality is presen 8.A beekeeper lives adjacent to an apple orchard.The orchard owner benefit from the bees because each hive pollinates about one acre of apple trees.The orchard owner pays nothing for this service,however,because the bees come to the orchard without his having to do anything Because there are not enough bees to pollinate the entire or h ard,the orchard owner must complete the pollination by artificial means,at a cost of$10 per acre of trees. Beekeeping has a marginal cost of MC 10+5Q,where Q is the number of beehives.Each hive yields $40 worth of honey. a. How many beehives will the beekeeper maintain? The beekeeper maintains the number of hives that maximizes profits,when marginal revenue is equal to marginal cost.With a constant marginal If there is a unit tax, then the new marginal private cost function is MC’=10+Q+tQ. If we now set this new marginal cost function equal to the price of 70 and substitute in 30 for the quantity, we can solve for t: 10+Q+tQ=70 Q(1+t)=60 1+t=2 t=1. The tax should be $1 per unit output. Note that with the tax equal to 1, the new private cost function is the same as the marginal social cost function. d. Calculate the output and price of dry cleaning if it is produced under monopolistic conditions without regulation. The monopolist will set marginal cost equal to marginal revenue. Recall that the marginal revenue curve has a slope that is twice the slope of the demand curve so MR=100-2Q=MC=10+Q. Therefore, Q=30 and P=70. e. Determine the tax that would result in a monopolistic market producing the socially efficient output. The tax is equal to zero since the monopolist will produce at the socially efficient output in this case. f. Assuming that no attempt is made to monitor or regulate the pollution, which market structure yields higher social welfare? Discuss. In this case it is actually the monopolist that yields the higher level of social welfare over the competitive market since the monopolist’s profit maximizing price and quantity are the same as the socially efficient solution. Since a monopolist tends to produce less output than the competitive equilibrium, it may end up producing closer to the social equilibrium when a negative externality is present. 8. A beekeeper lives adjacent to an apple orchard. The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. The orchard owner pays nothing for this service, however, because the bees come to the orchard without his having to do anything. Because there are not enough bees to pollinate the entire orchard, the orchard owner must complete the pollination by artificial means, at a cost of $10 per acre of trees. Beekeeping has a marginal cost of MC = 10 + 5Q, where Q is the number of beehives. Each hive yields $40 worth of honey. a. How many beehives will the beekeeper maintain? The beekeeper maintains the number of hives that maximizes profits, when marginal revenue is equal to marginal cost. With a constant marginal