Assume the Senator asks you of the optimal policy to combat CO2 emissions (carbon emissions). The senator is interested in implementing a policy that will reduce emissions from the power sector. The demand for electricity is P = 20 - 2 x Q where Q is amount of electricity demanded, and P is the price of electricity in MWh. The marginal cost of producing electricity is  MC = 2 x Q And the damage caused by pollution is MEC = Q What is the equilibrium price to consumers under competition

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Q: None

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