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Muddy Manufacturing finds it convenient to discharge some of its waste into nearby Crystal River, upstream from the town of Midville. Authorities in Midville estimate
Muddy Manufacturing finds it convenient to discharge some of its waste into nearby Crystal River, upstream from the town of Midville. Authorities in Midville estimate that each pound of waste costs the town $5.50 in terms of purification at the water plant, damage to fisheries, pollution of beaches, etc. They have asked Muddy to reduce emissions, but so far Muddy has not complied. Engineers at Muddy estimate that the company's profits are increased as more waste is dumped into the river, as follows: A) How much waste would Muddy dump in the river each minute (assuming Muddy is profit maximizing and does not consider the impact of their actions on others)? B) From a social point of view, what is the optimal amount of waste emission per minute? C) What of the following taxes on emissions would lead it to produce the same amount of emissions
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