b. There are two types of externalities in this problem. The first arises from the positive impact
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b. There are two types of externalities in this problem. The first arises from the positive impact that green cars have on the environment. Suppose that the social marginal benefit associated with this externality is an amount k per green car and illustrate in your graph the efficient number of cars x1 that this implies for “greenies.” Then illustrate the Pigouvian subsidy s that would eliminate the market inefficiency.
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Microeconomics An Intuitive Approach With Calculus
ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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