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Solve briefly A farmer produces avocados, which sell for Pa = 21 per box and cost C(a) = a2 to produce, where a is the
Solve briefly
A farmer produces avocados, which sell for Pa = 21 per box and cost C(a) = a2 to produce, where a is the number of boxes of avocados. A Fisherman catches fish in the nearby river, which sell for pf = 14 each. Both farmer and fisherman share the same water source and the fertilizer the farmers uses pollute the water source. As a result, the fisherman's cost of production is C(a, f) = 2f2 + af . Suppose the government imposes a tax t dollars on every box of avocados produced. The socially optimal amount of fish and the tax that induces the efficient outcome are O a. f = 2; t =1 Ob. f=1; t=2 Oc. f= 1;t =1 O d. f = 2; t = 2Step by Step Solution
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