Suppose the government knows the private and social marginal cost curves, MC, and MC, but it knows

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Suppose the government knows the private and social marginal cost curves, MC, and MC, but it knows the demand curve imperfectly. The government believes that the demand curve is either abQ or

a- bo The firms know the demand curve. Would the govern- ment do better using a tax or an output restriction? Why?

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Modern Industrial Organization

ISBN: 9780321011459

3rd Edition

Authors: Dennis W. Carlton, Jeffrey M. Perloff

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Question Posted: Nov 25, 2024 02:00 AM

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Suppose the government knows the private and social marginal cost curves, MC, and MC, but it knows

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Modern Industrial Organization

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