Consider a market given by the following supply and demand equationsP=8+2QP=97-3QIt is known that for every extra unit produced, society faces an extra cost of $8 perunit. Further it is known than each unit produced releases an extra 90.0 t of GHGinto the atmosphere. What would be the optimal level of pollution in this market?

The optimal level of pollution will lie where the social benefit from the last unit of pollution is…

Answered: ther it is known than each unit…

Business

Economics

ther it is known than each unit produced releases an extra 90.0 t of GI

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter17: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 3WNG

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Question

Consider a market given by the following supply and demand equations
P=8+2Q
P=97-3Q
It is known that for every extra unit produced, society faces an extra cost of $8 per
unit. Further it is known than each unit produced releases an extra 90.0 t of GHG
into the atmosphere. What would be the optimal level of pollution in this market?

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