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{15 points] Gruber Ch. 5, 113, A related question: Grub-er Ch. 5, [19 Suppose that the {external} damage done by pollution is known to be
{15 points] Gruber Ch. 5, 113, A related question: Grub-er Ch. 5, [19 Suppose that the {external} damage done by pollution is known to be MD = 300 + SQ, and the {private} cost and benefit are giyen by MC: 1m] + 2E! and M3 = Do 2Q. where Do is not precisely known. If DD = LUCIE, what would be the optimal quantity? What tax would be necessary in order for that to be the equilibrium quantity? Suppose that, based on the result from part a! a capandtrade system is imposed to allow the optimal quantity of pollution to be produced. If Du = see, what would be the deadweight loss associated with haying the wrong quantity? Supposed that, based on the result from part a, a tax is imposed to allow the optimal quantity of pollution to be prod uced. If Do = SDI], what would be the deadweight loss associated with haying the wrong tax leyel
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