Question
PLZ FILL IN THE BLANKS WITH THE INFORMATION PROVIDED The town of Lumberville has a pulp and paper factory that produces air pollution.The marginal damage
PLZ FILL IN THE BLANKS WITH THE INFORMATION PROVIDED
The town of Lumberville has a pulp and paper factory that produces air pollution.The marginal damage to the community is given by MD=3e, where e is the level of emissions from the factory.To reduce its emissions, the pulp and paper factory would face marginal abatement costs of MAC=20-2e.Suppose the factory's emission levels are currently unregulated.Using a graph with dollars on the vertical axis and e on the horizontal axis, answer the following questions:
28. If the factory's emission levels were reduced to the efficient level, the gain in net social welfare to the town of Lumberville would be $ ________________
29. Suppose the town of Lumberville were to enact a liability law that required the factory to pay for any environmental damages it caused.The amount of damage payments the factory would choose to pay under the liability law would be $ ________________.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started