Business, 13.04.2021 21:10 jazzhands16
3. Suppose that the inverse demand curve for paper is = 300 − 2, the private total cost is =
50 + 2 Cp = 50Q + Q2 . During the production of paper, pollution is generated and the total
external cost from pollution is = 0.52.
3.1 What is the unregulated competitive equilibrium?
3.2 What is the social optimum? What specific tax (per unit of output) results in the social optimum
if a perfectly competitive market exists?
3.3 Assume that a monopoly market structure exists. What is the unregulated monopoly
equilibrium? What specific tax (per unit of output) results in the social optimum?
Answers: 1
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3. Suppose that the inverse demand curve for paper is = 300 − 2, the private total cost is =
50 + 2...
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