Question
The graph shows the market for liquid fertilizer. When firms produce liquid fertilizer they also create waste, which they dump into lakes. The govemment
The graph shows the market for liquid fertilizer. When firms produce liquid fertilizer they also create waste, which they dump into lakes. The govemment has assessed the marginal external cost of pollution accurately and imposes a tax on the firms that exactly equals this cost. When the market is in equilibrium, how much does the government collect each month in tax revenue? Price and cost (dollars per ton) 560- S-MC+Max+MSC 500 480- 400- 320-300 240 180 When the market is in equilibrium, the government collects a month in tax revenue. 160-140 80- MG D-MSB 2 4 Quantity (thousands of tons per month)
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Get StartedRecommended Textbook for
Microeconomics
Authors: Michael Parkin
11th edition
133019942, 978-0133020250, 133020258, 978-0133019940
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