branding iron products a specialty steel fabricator, operates a plant in the tow

Question

branding iron products a specialty steel fabricator, operates a plant in the town of west star, texas. the town has grown rapidly because of recent discoveries of oil and gas in the area. many of the new residents have expressed concern at the amount of pollution( primarily particular matter in the air and waste water in the town's river) emitted by branding iron. three proposals have been made to remedy the problem: a. impose a tax on the amount of particulate matter and the amount of waste water emitted by the firm. b. prohibit pollution by the firm. c. offer tax incentives to the firm to clean up its production processes. Evaluate each of these alternatives from the perspectives of economics efficiency, equity and the likely long term impact on the firm.

Explanation / Answer

first option is economically good for government and firm too. it is efficient in reducing pollution. and it will have long term impact..... ....... second option is economically not good for government and firm too. because some pollution will happen if there is industry and if no pollution is neede one has to close the firm it is efficient in reducing pollution. and it will have long term impact .. 3rd option is not economically good for government . it is not efficient in reducing production. because tax incentives may be too less for companies to decreasing pollution and it will not have long term impact

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