A polluting firm''s marginal benefit of releasing pollution

Assignment Help Microeconomics

Reference no: EM13752236

A polluting firm's marginal benefit of releasing pollution is MB g = 100-2⋅g, where g is tons of air pollution released into the atmosphere and MBg is its marginal benefit from releasing pollution, in dollars per ton. The marginal external costs of its pollution are given by MEC g=100 +g, where MECs is the external costs to society, also in dollars per ton.

(a) If the firm chooses its pollution level ignoring the marginal external costs, how much pollution will there be?

(b) What is the socially optimal level of pollution?

(c) If you were to design a Pigouvian (unit) tax per unit of pollution emitted by the firm, in order to get it to reduce its pollution emissions, what would the magnitude of this tax be?

Reference no: EM13752236

Questions Cloud

A midsize manufacturing firm as an accountant : Imagine that you work for a midsize manufacturing firm as an accountant. You have just received a promotion that requires you to move across the country. Since this promotion comes with a hefty raise in salary (you will now make $85,000 a year), you ..

Countries are different in terms of cultural dimensions : Describe how the two countries are different in terms of Hofstede's five cultural dimensions. Given a scenario where two organizations, one located in each country, are to do business with each other, provide recommendations that would be benefici..

Calculate the acceleration a of the centre of the wheel : Explain what you believe is the procedure to calculate each variable. Also, explain what each of the above variables means - Calculate the acceleration a of the centre of the wheel. First prove that the wheel slips.

Financial planning and agency conflicts : From the scenario, cite your forecasting conclusions (financial data from TFC's financial statements and forecasted statements) that support TFC's to expand to the West Coast market. Note: the response has to include specific operational, financi..

A polluting firm''s marginal benefit of releasing pollution : A polluting firm's marginal benefit of releasing pollution is MB g = 100-2⋅g, where g is tons of air pollution released into the atmosphere and MBg is its marginal benefit from releasing pollution, in dollars per ton. The marginal external costs of ..

Identify and describe any potential ethical issues : Explain what type of architecture the new payroll application should use and why and Identify and describe any potential ethical issues that could arise in connection with the new architecture

Create a political cartton that goes with man walks on moon : create a Political Cartton that goes with articals MAN WALKS ON MOON, ASSASSIN KILLS KENNEDY and HIGHSCHOOL MASSACRE. There will be a total of 3 Political Cartton.

Evaluate methods to protect the organization : Evaluate methods to protect the organization from internal and external threats. Develop a proactive plan of environmental scanning to evaluate any existing threats to AGC.

Herschs after-tax required rate of return and tax rate : Aaron Hersch is a real estate developer who specializes in residential apartments. A complex of 20 run-down apartments has recently come on the market for $332,500. Hersch predicts that after remodeling, the 12 one-bedroom units will rent for $380 pe..

User Account

All Pages