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. Suppose there are two firms in the market. Firm 1 produces y with a cost function c1(y) = y2 + 10 and firm 2
. Suppose there are two firms in the market. Firm 1 produces y with a cost function c1(y) = y2 + 10 and firm 2 produces x with the cost function c2(y, x) = x 2 + 5y. What is the efficient Pigouvian tax on good y? Explain your calculation/work.
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