Please provide detailed solution, with step by step. Preferentially done on a pa

Question

Please provide detailed solution, with step by step. Preferentially done on a paper and scanned

(i) Consider a static model. Suppose that inverse demand is 10 - q, firms are competitive with constant average = marginal costs C, and pollution-related damages (arising from output) are q + 1/2 beta q^2 with beta > 0 What is marginal damage? Suppose that there is a policy that reduces C e.g. by making production more efficient. How does this reduction in C alter the Pigouvian tax that you identified in question #2b? (ii) Are the two policies (the pollution tax and the policy that reduces C) complements are substitutes? Explain. (iii) How would the answer to part (ii) have changed if beta = 0? Explain.

Explanation / Answer

Visit http://www.writingcentre.us/ for more help

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.