Companies producing toilet paper bleach the paper to make it white. The bleach is discharged into nvers and lakes and causes substantial environmental damage. The diagram to the right illustrates the situation in the toilet paper market. Suppose the government wants to use a Pigovian tax to bring about the efficient level of production. What should the value of the tax be? OA $(P₂P per ton of output OB. $P, per ton of output Oc. $(P₂P) per ton of output OD. $(P₁-P per ton of output Cost orbenen per unit Marginal Marginal social cost private cost 10₁ 10₂ 103 104 Quantity of pollution reduction Marginal Benefit

Companies producing toilet paper bleach the paper to make it white. The bleach is discharged into nvers and lakes and causes substantial environmental damage. The diagram to the right illustrates the situation in the toilet paper market. Suppose the government wants to use a Pigovian tax to bring about the efficient level of production. What should the value of the tax be? OA $(P₂P per ton of output OB. $P, per ton of output Oc. $(P₂P) per ton of output OD. $(P₁-P per ton of output Cost orbenen per unit Marginal Marginal social cost private cost 10₁ 10₂ 103 104 Quantity of pollution reduction Marginal Benefit

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.11P

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