The Efficient Pollution Control Regulatory System Essay

The Efficient Pollution Control Regulatory System - Essay Example increase in price of bread as delineated in the diagram above by an increase in price of bread from P0 to P1 , this result to a new equilibrium in the market E1. (ii) Complementary goods are that usually consumed together (jointly consumed goods). In the case of Complementary goods when the demand r the price of the other good is decreased. Bread and butter are complementary goods, therefore they exhibit a cross elasticity of demand so when the price for margarine and butter is increased it result to a decrease in demand of bread causing a inward shift of the demand curve thus the quantity of bread demanded falls. PRICE D1 D0 S P2 P1 D0 D1 0 Q1 Q0 QUANTITY BREAD From the above diagram an increase in price of butter and margarine will cause shift the demand curve of bread from D0 D0 to D1 D1. This results in a decline in the amount of bread demand illustrated by a shift by the demand curve. ii) In the case of increase in the price of potatoes, rice and pasta, these could are not relat ed in any way. Therefore, they would not result in influencing an increase in the quantity of bread demand or supplied since these goods are not related in way. This can be illustrated by the diagram below. Price D0 S0 P0 S0 D0 Q0 Quantity From the above diagram, an increase in price of rice, potatoes and pasta does not in way affect the quantity of bread demand or supplied. Q2. A) A graph illustrating shortages causes by price controls. price DB DA S $4 $3 DB S DA 0 QS Q* QA QB Quantity In the above diagram when the price of a kilo of banana is $4 the quantity demanded is Q, that is where the demand is equal to the quantity supplied. When the price is fixed at $3 per kilo of banana the quantity supplied is Qs, while the quantity demanded is QA and QB for both cities A and B respectively.... When individuals fall they have to seek medical attention thus incurring huge medical bills. Therefore, pollution of storm water negative contributes to the society. The company polluting the stormwater on the other hand enjoys returns emanating from their production activities without considering the cost that they pass on to the society when pollute the environment t(Haley, 121) In addition to this pollution of storm water, depletes the amount of water available for human consumption therefore individuals have to search for other alternative sources of water which are not expensive but water becomes scarce. This represents an additional cost to the society occasioned by the production activities of the firm (Haley, 131) Therefore in order to minimize the amount of pollution of our environment the government needs to intervene so as to reduce amount emission that the firm releases to river as well as other air. The best method to caution the society from the externalities is by charging the polluting firms a standard fee that would go towards financing the affected individuals in circumstances like subsidizing their medical or treatment of the polluted water. Introduction of laws that would require firms which pollute the environment to pay. This would be essential, since firms are supposed to be in the frontline of preserving the environment, therefore, they have to pay when pollute the environment. Apart from this, the polluting company should compensate the society for the cost incurred from their production activities.