If MBmi(s)=180-15s and MCtown(s)=5s, how much pollution is emitted with no controls on pollution? What is the optimal amount of pollution (s*)? How much would the firm abate (A*)?

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
ChapterST11: Difficult Environmental Cases And The Role Of Government
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If MBmi(s)=180-15s and MCown(s)=5s, how much pollution is emitted with no controls on pollution?
What is the optimal amount of pollution (s*)?
How much would the firm abate (A*)?
If the government used a pollution tax to achieve s*, where would it set the tax?
How much would this tax raise in revenues?
What would be the total abatement cost?
Transcribed Image Text:If MBmi(s)=180-15s and MCown(s)=5s, how much pollution is emitted with no controls on pollution? What is the optimal amount of pollution (s*)? How much would the firm abate (A*)? If the government used a pollution tax to achieve s*, where would it set the tax? How much would this tax raise in revenues? What would be the total abatement cost?
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