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Suppose the snowplowing service described in Exercise 6 is financed by distortionary taxation. The MCF varies with the amount of tax revenue, R, that is

Suppose the snowplowing service described in Exercise 6 is financed by distortionary taxation. The MCF varies with the amount of tax revenue, R, that is raised: MCF = 1 + 0.0002441R^2 If tax revenue is raised only to finance the snowplowing of Thelma and Louises street, what is the optimal provision of the snowplowing service? (Assume that snowplowing does not affect the amount of revenue generated by the tax system and that the average cost of snowplowing is equal to the marginal cost, $16.)

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