A steel producing firm has a demand fianction given as P = 30 - Q. the cost function facing the firm is given as and C = 200+ Q2. This firm emit its waste into a river and it cost the fish farmers C = 20 + 2.5Q2 to clean the river. Required i) Market Competition equilibrium price and quantity ii) Socially efficient equilibrium price and quantity iii) Amount of Corrective [Pigovian] tax per unit
A steel producing firm has a demand fianction given as P = 30 - Q. the cost function facing the firm is given as and C = 200+ Q2. This firm emit its waste into a river and it cost the fish farmers C = 20 + 2.5Q2 to clean the river. Required i) Market Competition equilibrium price and quantity ii) Socially efficient equilibrium price and quantity iii) Amount of Corrective [Pigovian] tax per unit
Chapter14: Environmental Economics
Section: Chapter Questions
Problem 11SQ
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3. A steel producing firm has a demand fianction given as P = 30 - Q. the cost function facing the firm is given as and C = 200+ Q2. This firm emit its waste into a river and it cost the fish farmers C = 20 + 2.5Q2 to clean the river.
Required
i)
ii) Socially efficient equilibrium price and quantity
iii) Amount of Corrective [Pigovian] tax per unit
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