Question
A market contains the following private functions: MPB = 144 - 0.12Q MPC = 23 + 0.08Q And it also contains two externalities: a negative
A market contains the following private functions:
MPB = 144 - 0.12Q
MPC = 23 + 0.08Q
And it also contains two externalities: a negative consumption externality, given by MEC = 7 + 0.05Q, and a positive production externality, given by MEB = 1.6.
Calculate the per unit tax that should be charged to make the market efficient.
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Managerial Economics And Financial Analysis
Authors: M.S. Bhat, A.V. Rau
1st Edition
9352300211, 978-9352300211
