Use the model of environmental pollution to model the following changes in a polluting industry to: i) the socially optimal level of pollution; ii) the total abatement costs; and ii) the total damage costs (а) A new technology is invented that allows firms to reducе pollution associated with each level of production output. (b) The government announces a new commitnment to more strictly enforce current environmental regulations. (c) A new study finds the pollutant in question to be more carcinogenic than originally thought

Use the model of environmental pollution to model the following changes in a polluting industry to: i) the socially optimal level of pollution; ii) the total abatement costs; and ii) the total damage costs (а) A new technology is invented that allows firms to reducе pollution associated with each level of production output. (b) The government announces a new commitnment to more strictly enforce current environmental regulations. (c) A new study finds the pollutant in question to be more carcinogenic than originally thought

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 13PAE

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The following graph represents the market for high-emissions cars. Answer this question assuming that the externality is not internalised. 1. What is the private value of the last unit traded (or the willingness to pay of the marginal buyer) in the market? 2. What is the private cost of the last unit produced and traded (or the private cost to the marginal seller) in the market? 3. What is the social cost of the last unit traded in the market? 4. In the stylised model, what is the cost of pollution per high-emission vehicle purchased by buyers equal to?