2. Assume the demand and marginal cost conditions given in the second selftest exercise in Chapter 2.

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2. Assume the demand and marginal cost conditions given in the second selftest exercise in Chapter 2. In addition, assume that the government imposes a price control at P = +80>3.

(a) Find the consumer and producer surplus associated with the resulting allocation.

(b) Compare this price control allocation to the monopoly allocation in part

(c) of that self-test exercise.

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Environmental And Natural Resource Economics

ISBN: 9781315523965

10th Edition

Authors: Thomas H Tietenberg, Lynne Lewis

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