Describe two private benefits and two external costs

Reference no: EM133531427

Question: Discussion and relevant microeconomic theory: (i) identify the key parties involved within and those external to the market transaction; (ii) describe two private benefits and two external costs of heavy vehicle usage; (iii) draw an appropriate diagram to illustrate and explain the negative production externality; and (iv) critically evaluate the specified tax policy to help solve the market failure in this case. To make constructing the diagram simpler, assume that the market is competitive and use hypothetical data (rough guesses on the x- and y- axes with somewhat realistic values) relying on intuition where applicable.

Reference no: EM133531427

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