Will the tax rate increase or decrease

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When there is both (i) a decreWhat will happen to the socially efficient emissions level if there is both (i) a decrease in marginal abatement costs (ii) an increase in marginal damages? ase in marginal abatement costs (ii) an increase in marginal damages, what will happen to the optimal emissions tax rate that the regulator sets to achieve the socially efficient emissions level? Will the tax rate increase or decrease for sure, or does the answer depend on how much marginal abatement costs decrease by and how much marginal damages increase by?

Reference no: EM133629460

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