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V. Consider a perfectly competitive nonrenewable natural resource industry for which the marginal cost of extraction is constant. For each of the following cases, discuss
V. Consider a perfectly competitive nonrenewable natural resource industry for which the marginal cost of extraction is constant. For each of the following cases, discuss whether the rate of extraction would be slower, faster, or equal to the efficient rate. A. Firms in the industry have to pay a tax of T dollars for each ton of the resource extracted and the value of T will be the same in every period. B. Firms in the industry have to pay a tax equal to m percent of total revenue. C. If instead of being constant the cost of extraction increases with the cumulative amount of extraction, the use of a tax per unit extracted could result in inefficiency due to "high grading." Explain why
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