Discuss how this could achieve and efficient outcome

Reference no: EM133613862

Problem: You must select and refer to that graph number (as appropriate) in your answer. Be sure to discuss fully any graphs or diagrams. What is marginal social cost? Show that without government intervention negative externalities associated with the production of a polluting good generate market inefficiency. Suppose that the government were to address this market failure with the use of a tax per unit of emissions. Assuming that the elasticity of demand were relatively inelastic, choose the appropriate diagram and discuss how this could achieve and efficient outcome, and detail the burden of taxation between consumers and producers.

Reference no: EM133613862

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