Question

need the complete answers of question 1 & 2:

Question 1:

5 towns share a common water source. By buying the land around the water source, the towns can protect the water's purity and therefore save water treatment costs. The land demand schedule for each town is:

P_i = 37,000 - 10*Q

where Q is the quantity of land in acres and P_i is the price per acre that the town would be willing to pay.

Suppose the cost of land is 35,000 euro per acre.

1) How much land will be purchased in total when each town acts independently?

Q_independent =   

2) Suppose the towns form a joint commission for land purchases. How much land will the joint commission purchase in total?

Q_commission =   

3) What is the socially efficient amount of land purchases?

Q_efficient =   

Now suppose the cost of land rises to 39,000 euro per acre.

4) How much land will be purchased in total when each town acts independently?

Q_independent =   

5) Suppose the towns form a joint commission for land purchases. How much land will the joint commission purchase in total?

Q_commission =   

6) What is the socially efficient amount of land purchases?

Q_efficient =   

Question 2:

Suppose the demand curve for laptops is:

P_d = 52 - 4 * Q

where Q is the quantity demanded. The supply curve is:

P_s = 11 + 5 * Q

Laptop production, considering the materials used, the wastes created, transportation, and packing results in 8 euro of external costs per laptop.

Solve for the equilibrium price (P_m) and quantity (Q_m) in the unregulated laptop market.

Q_m =    

P_m =    

What is total social welfare (W_m) in the unregulated laptop market? Solve for consumer surplus (CS_m), producer surplus (PS_m), and the externality damage (ED_m).

CS_m =   

PS_m =   

ED_m =   

W_m =   

If the correct Pigouvian tax is instituted, what will be the equilibrium price (P_t) and quantity (Q_t) in the laptop market?

Q_t =    

P_t =    

What is total social welfare (W_t) in the laptop market with the correct Pigouvian tax? Solve for consumer surplus (CS_t), producer surplus (PS_t), the externality damage (ED_t), and the tax revenues (TR).

CSt =   

PS_t =   

ED_t =   

TR =     

W_t =