That is the newest in our sequence of posts in our sequence on value idea issues with Professor Bryan Cutsinger. You possibly can see all of Cutsinger’s issues and options by subscribing to his EconLog RSS feed.
Share your proposed options within the feedback. Professor Cutsinger will likely be current within the feedback for the subsequent couple of weeks, and we’ll submit his proposed resolution shortly thereafter. Could the graphs be ever in your favor, and lengthy reside value idea!
Query: The Texas Minimal Building Requirements require that each one plumbing fixtures be WaterSense licensed. Examples of necessities below these requirements embrace low-flow taps, bathe heads, and bogs.
Suppose, for the sake of argument, that earlier than the requirement for low-flow bogs went into impact, putting in a normal-flow bathroom price $250. Suppose additionally that putting in a low-flow bathroom prices plumbers a further $100 below the laws, and that their prospects worth the financial savings from low-flow bogs at $25 per bathroom.
Illustrate how the demand and provide curves for bogs shift on account of the legislation. What occurs to the worth of a brand new bathroom (offering a spread of latest costs is ample)? Who good points from the legislation: plumbers, their prospects, each, or neither? Justify your reply.
