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Snidely Whiplash owns a car factory. His supply curve for producing cars is given by QS = P/100 . The demand curve for cars is

Snidely Whiplash owns a car factory. His supply curve for producing cars is given by QS = P/100 . The demand curve for cars is given by QD = 1, 000 P/25 . His factory pollutes the local river, such that the local community is made $5,000 worse off for each car he produces. If that Pigouvian tax were levied, what would be the price(s) in the market for Snidely's cars? How large would consumer surplus, producer surplus, external costs, and tax revenue be? How large is the deadweight loss due to the externality? (g) (2 points) Imagine a study discovers that pollution is even worse than we thought, and so the local community is actually made worse off by $30,000 per car produced. In that case, what is the efficient quantity? (h) (2 points) If the government imposed the Pigouvian tax that would produce the efficient quantity (given an externality of $30,000 per car), how large would consumer surplus, producer surplus, external costs, and tax revenue be

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