-The Above Figure Shows the Market for Fertilizer

question 2

Essay

-The above figure shows the market for fertilizer. When fertilizer is applied to lawns, it runs off into neighboring streams and ponds, killing fish and creating an external cost.
a) What is the equilibrium price and quantity of fertilizer in an unregulated, competitive market?
b) What is the efficient quantity of fertilizer?
c) Suppose government imposes a tax equal to the marginal external cost. What is the equilibrium price paid by consumers and the equilibrium quantity after implementation of the tax?
d) At the output level in part (c), how much is the tax?
e) How much tax revenue does government collect?
f) What is the deadweight loss borne by society if the externality is left uncorrected?

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Definitions:

Romberg Balance Test

A test used to assess a person's balance and proprioception by having them stand with their feet together and eyes closed.

Muscle Abnormality

Any deviation from the normal structure or function of muscles, which can impact movement and coordination.

Heel-To-Shin Test

A neurological examination where the patient is asked to slide their heel down the shin of the opposite leg, used to assess coordination and balance.

Posterior Pharynx

The rear part of the throat, extending from the nasopharynx and oropharynx down to the laryngopharynx.