Pigouvian tax-externalities

Reference no: EM1368003

The private marginal benefit for commodity X is given by 10 - X where X is the number of units consumed. The private marginal cost of producing X is constant at $5. For each unit of X produced, an external cost of $2 is imposed on members of society. In the absence of any government intervention, how much X is produced? What is the efficient level of production of X? What is the gain to society involved in moving from the inefficient to the efficient level of production? Suggest a Pigouvian tax that would lead to the efficient level. How much revenue would the tax raise?

Reference no: EM1368003

Questions Cloud

Mind body intervention treatments : Please help give some insight, direction, or feedback on the points below for the Mind Body Intervention treatments.

See hidden file by looking at floppy using windows explorer : Would you see hidden file by just looking at the floppy using Windows Explorer? Why or Why not? What other tools could you use to retrieve evidence?

Explain how you account for those themes : Explain how you account for those themes and what relationships do you see between your peers' assessment results, the skills they acquired, and the skills they still need to work on?

Show job design and scheduling for wal-mart : How would Forward and Backward Scheduling inform managerial decision-making in that organization and what are the benefits and difficulties of scheduling for the organization to implement this concept

Pigouvian tax-externalities : The private marginal benefit for commodity X is given by 10 - X where X is the number of units consumed. The private marginal cost of producing X is constant at $5. For each unit of X produced, an external cost of $2 is imposed on members of socie..

Behavioural studies - learning behaviours : Provide an overview of two leadership behavioural studies, concentrating on their implications to better understand a leader.

Create incident response policy for development of response : Create the incident response policy which covers the development of incident response team, disaster recovery process and business continuity planning.

Calculate the lowest price of a share : A corporation has issued convertible preferred stock to its venture shareholders. Every share of preferred stock is convertible into 0.75 shares of common stock and pays an yearly cash dividend of $0.13.

Immunization program for children in a day-care setting : What practical value is available via the standards for community nurses undertaking the immunization program for children in a day-care setting?

User Account

All Pages