Suppose that a government imposes an emission standard, and per unit fines for exceeding the standard, at
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Suppose that a government imposes an emission standard, and per unit fines for exceeding the standard, at the socially efficient pollution level. If polluters believe that the probability of detecting standard breaches is not certain, illustrate the privately efficient outcome and any associated welfare loss. What per unit fine would induce the socially efficient outcome?
Related Book For
Economics
ISBN: 978-0073375694
18th edition
Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn
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