Question
Suppose the inverse market demand curve for a carcinogenic industrial chemical is P = 322 -0.05Qd and inverse market supply is P = 45 +
Suppose the inverse market demand curve for a carcinogenic industrial chemical isP = 322 -0.05Qdand inverse market supply isP = 45 + 0.02Qs.
The chemical causes $77/unit of health care costs and loss of life due to cancer. If the chemical is taxed optimally to internalize the externality, by how much will production (and consumption) be reduced, to the nearest 1 unit?
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A Course In Environmental Economics
Authors: Daniel J Phaneuf, Till Requate
1st Edition
1316866815, 9781316866818
