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Firm A: costs of CA (A) = 42 10 ' Firm B: costs of CB ( A, B) = 5B + B2 100 + .

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Firm A: costs of CA (A) = 42 10 ' Firm B: costs of CB ( A, B) = 5B + B2 100 + . A2 20 Assume competitive price of A is $30 and price of B is $15. Suppose the socially optimal A*=100 and B*=500. What is the tax per A, that would induce efficiency? 20 25 30 #10 O 15

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