That is the most recent in our sequence of posts in our sequence on value principle issues with Professor Bryan Cutsinger. You may see all of Cutsinger’s issues and options by subscribing to his EconLog RSS feed.
Share your proposed options within the feedback. Professor Cutsinger shall be current within the feedback for the following couple of weeks, and we’ll put up his proposed answer shortly thereafter. Could the graphs be ever in your favor, and lengthy stay value principle!
Query: The Texas Minimal Development Requirements require that every one plumbing fixtures be WaterSense licensed. Examples of necessities underneath these requirements embody low-flow taps, bathe heads, and bathrooms.
Suppose, for the sake of argument, that earlier than the requirement for low-flow bathrooms went into impact, putting in a normal-flow rest room value $250. Suppose additionally that putting in a low-flow rest room prices plumbers an extra $100 underneath the laws, and that their prospects worth the financial savings from low-flow bathrooms at $25 per rest room.
Illustrate how the demand and provide curves for bogs shift because of the regulation. What occurs to the worth of a brand new rest room (offering a variety of latest costs is enough)? Who beneficial properties from the regulation: plumbers, their prospects, each, or neither? Justify your reply.