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The market for paper in Ontario has the supply and demand curves as follows QG (3 marks). The market for paper in Ontario has the

The market for paper in Ontario has the supply and demand curves as follows

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QG (3 marks). The market for paper in Ontario has the supply and demand curves as follows\" Qd = 160,000 2,000}? Q; = 40,000 + 2,000p, where Q is measured in hundred-pound lots, and p is price per hundred-pound lot. Without the regulation against dumping of pollutants into rivers by the paper mills, dumping is widespread. The marginal external cost associated with the paper production is m = 0.00029 Compare the competitive equilibrium with the socially optimal equilibrium and calculate the deadweight loss

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