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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

What is a pollution charge and what incentive does it provide for a firm to take external costs into account?

To determine

Pollution charge and incentives it provide for the firm to consider external costs into account.

Explanation

A pollution charge is defined as a tax imposed on the quantity of pollution that a firm usually emits. A pollution charge provides a profit-maximizing firm a motivation to figure out the ways to decrease its emissions—as long as the marginal cost of decreasing the emissions is less than the tax...

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