Assume that the U.S. market for some inorganic chemical is modeled as follows, where Q is in

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Assume that the U.S. market for some inorganic chemical is modeled as follows, where Q is in thousands of kilograms, P is price per kilogram, and there are no consumption externalities:

MSB = 90 ‒ 0.5Q

MSC = 30 + 0.3Q
MEC = 0.2Q

a. Find the competitive equilibrium.

b. Find the efficient equilibrium.

c. Determine the dollar value of the Pigouvian tax that would ensure an efficient equilibrium.

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Environmental Economics and Management Theory, Policy and Applications

ISBN: 978-1111826673

6th edition

Authors: Scott J. Callan, Janet M. Thomas

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Question Posted: Sep 22, 2018 12:52 PM

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Assume that the U.S. market for some inorganic chemical is modeled as follows, where Q is in

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a Competitive equilibrium arises at the point where ...View the full answer

Environmental Economics and Management Theory, Policy and Applications

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