Quiz Space

Managerial Economics · End Term · 10 May 2026 · January 2026 term · Set 1-2

Question 4: Determine the socially efficient quantity of the paper. Q…

Question 4

+1.5 marksNumerical answer

The market for paper in southern region in the India is characterized by the following demand and supply curves: QD = 160,000−2000P and QS = 40,000+2000P, where QD is the quantity demanded in 100-pound lots, QS is the quantity supplied in 100-pound lots, and P is the price per 100-pound lot. Currently there is no attempt to regulate the dumping of effluent into streams and rivers by paper mills. As a result, dumping is widespread. The Marginal External Cost (MEC) associated with the production of paper is given by the curve MEC = 0.0006QS.
Based on the above data, answer the given subquestions.

Determine the socially efficient quantity of the paper. Q = _________

Show answer

Correct answer: 62500

Video solution

The video solution to this question is being recorded and will play here. Until then, the answer key is above.

See the whole paperTake it as a mock test

Question 4 of 36 in the IIT Madras BS Managerial Economics (Managerial Economics) End Term paper sat on 10 May 2026, in the January 2026 term (Managerial Economics 06 May 26). It carries 1.5 marks.

More questions from this paper

  1. Q1Calculate the output of paper if it is produced under competitive conditions and no attempt is made to monitor or regul…
  2. Q2Calculate the Price of paper if it is produced under competitive conditions and no attempt is made to monitor or regula…
  3. Q3Determine the socially efficient price of the paper. P =
  4. Q5What is the profit maximizing price that BA will charge?
  5. Q6How many passengers will be on each flight in equilibrium?
  6. Q7What is BA’s profit for each flight?
  7. Q8Now, suppose BA realizes that the fixed costs per flight are in fact 25000 instead of 20000. It also finds out that two…
  8. Q9Now, suppose BA realizes that the fixed costs per flight are in fact 25000 instead of 20000. It also finds out that two…
  9. Q10Now, suppose BA realizes that the fixed costs per flight are in fact 25000 instead of 20000. It also finds out that two…
  10. Q11Now, suppose BA realizes that the fixed costs per flight are in fact 25000 instead of 20000. It also finds out that two…
  11. Q12Now, suppose BA realizes that the fixed costs per flight are in fact 25000 instead of 20000. It also finds out that two…
  12. Q13Now, suppose BA realizes that the fixed costs per flight are in fact 25000 instead of 20000. It also finds out that two…
  13. Q14Now, suppose BA realizes that the fixed costs per flight are in fact 25000 instead of 20000. It also finds out that two…
  14. Q15What is the cost minimizing quantity of labour and capital respectively for producing 9000 units of output? L =
  15. Q16What is the cost minimizing quantity of labour and capital respectively for producing 9000 units of output? K =
  16. Q17What is the minimum cost of producing 9000 units of output in INR?
  17. Q18Expected value of first product is _\ NOTE: Enter the exact answer without any extra space in the beginning or at the e…
  18. Q19Expected value of second product is _\ NOTE: Enter the exact answer without any extra space in the beginning or at the …
  19. Q20Choose the correct alternative(s)
  20. Q21Consider two investment opportunities in new products: gourmet marmite and gourmet honey. People might either really li…
  21. Q22If there is no tariff, what is the quantity demanded (in thousand litres)
  22. Q23If the tariff is imposed, how much a consumer will pay for a litre of palm oil
  23. Q24What is the new quantity demanded now (in thousand litres)?
  24. Q25What will be the lost consumer surplus due to the imposed tariff (in thousand INR) _
  25. Q26Tax revenue for the government will be (in thousand INR)
  26. Q27Tariff results in
  27. Q28Find the optimal bundle of goods 1 and 2 for this consumer. The optimal bundle will consist of X1 = _
  28. Q29Find the optimal bundle of goods 1 and 2 for this consumer. The optimal bundle will consist of X2 = _
  29. Q30The slope of the marginal revenue curve is
  30. Q31Profit-maximizing price for this monopolist is
  31. Q32Profit-maximizing quantity for this monopolist is _
  32. Q33The price elasticity of demand at the profit-maximizing point is _
  33. Q34What is true about monopolistic competition
  34. Q35Adverse selection occurs when
  35. Q36Moral hazard occurs when contracts are written in such a way that