There Is a Concern That Carbon Emissions That Are a Byproduct

question 31

Essay

There is a concern that carbon emissions that are a byproduct of the burning of coal and other fuels contributes to global warming. One proposed solution is to tax the use of these fuels based on their carbon content. The following table gives information on the demand and supply of coal: $$\begin{array} { | l | r r r r r | } \hline \text { Price (\$/ton) } & 400 & 358 & 300 & 250 & 200 \\\hline \text { Quantity demanded } & 10 & 12 & 14 & 16 & 18 \\\hline \text { Quantity supplied } & 18 & 16 & 14 & 12 & 10 \\\hline\end{array}$$ What will be the free-market price and quantity, and what will be the price and quantity if the government requires suppliers to pay a $100 tax for each ton of coal produced?

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Definitions:

Product Cannibalization

The reduction in sales volume, revenue, or market share of one product as a result of the introduction of a new product by the same producer.

New-Category Entries

Products or services that introduce a new category to the market, often requiring the creation of demand and consumer education.

Planned Obsolescence

A business strategy in which the obsolescence of a product is planned and built into it from its conception, ensuring that consumers will need to purchase new products.

Ethical Issue

A situation or problem that requires individuals or organizations to choose between alternatives that must be evaluated as right or wrong, ethical or unethical.