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The government is charging a polluter an emission tax. With their current marginal abatement costs, the polluter is choosing to emit 840 units, and when
The government is charging a polluter an emission tax. With their current marginal abatement costs, the polluter is choosing to emit 840 units, and when the polluter lowers their marginal abatement cost function the polluter chooses to emit 710 units. With both marginal abatement cost functions, the polluter's maximum emission level is 1100.
If their incentive to lower their marginal abatement cost function equals $2000, how much tax must they be paying per unit of emissions?
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