Problem
Consider the following model of a hypothetical market for MSW management services:
MPB = 25 - 2Q
MPC = 4 + Q
MEC = 0.5Q
where Q is the number of trash containers per household per month.
a. Quantitatively determine the effect of the resource misallocation due to: (i) the presence of the negative externality, and (ii) the use of a flat fee pricing system in the presence of a negative externality. b. Support your answer to part (a) with a graphical model.
c. Determine the dollar value of a waste-end charge that would restore efficiency to this market. Explain your answer intuitively.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.