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Using the Metcalf graph framework, assume that the curve representing the social marginal benefits of pollution abatement is steeper than the curve representing the social
Using the "Metcalf graph" framework, assume that the curve representing the social marginal benefits of pollution abatement is steeper than the curve representing the social marginal costs of pollution abatement and that policymakers are uncertain about the location of the social marginal benefits curve.In this scenario, would "cap and trade" or a pollution tax approach to reducing pollution have a smaller deadweight loss?Explain in words and graphically.
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