Consider a symmetric oligopoly in which firms technologies satisfy assumption 5.1. Assume that firms get part of
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Consider a symmetric oligopoly in which firms’ technologies satisfy assumption 5.1. Assume that firms get part of the tax revenues refunded, according to their market shares. The refund share is 0 A typical firm’s profit is thus given by: (a) Show that the first-best outcome can be achieved by a tax on emissions and a refunding system according to market share, if the damage from pollution is sufficiently high. (b) Determine the optimal levels of the tax and the refunding share d. assumption 5.1
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Part a Part b The firstbest outcome is achieved when the social planner maximizes the total surpl...View the full answer
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Related Book For 
A Course In Environmental Economics
ISBN: 9781316866818
1st Edition
Authors: Daniel J Phaneuf, Till Requate
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