The marginal damage averted from pollution cleanup is MD = 200 – 5Q. The total cost associated with pollution cleanup is TC = 10Q + 0.5Q^2. a. What is the optimal level of pollution reduction? Show yo...

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The marginal damage averted from pollution cleanup is MD = 200 – 5Q. The total cost associated with pollution cleanup is TC = 10Q + 0.5Q^2. a. What is the optimal level of pollution reduction? Show yo...

The marginal damage averted from pollution cleanup is MD = 200 – 5Q. The total cost associated with pollution cleanup is TC = 10Q + 0.5Q^2. a. What is the optimal level of pollution reduction? Show your work and explain

b. What amount of tax per unit would generate the optimal amount of pollution reduction from part (a)? Show your work and explain

business economics

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Answer 1

Answer #1

total Abatement cost) %o a) at optimal level of pollution Reduction, MAC-MD sons

B) now eqm tax = MAC at the optimal level of pollution reduction

= 10+Q*

= 10+31.67

=41.67 $ per unit

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Answer 2

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The marginal damage averted from pollution cleanup is MD = 200 – 5Q. The total cost associated with pollution cleanup is TC = 10Q + 0.5Q^2. a. What is the optimal level of pollution reduction? Show yo...

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Add Answer to: The marginal damage averted from pollution cleanup is MD = 200 – 5Q. The total cost associated with pollution cleanup is TC = 10Q + 0.5Q^2. a. What is the optimal level of pollution reduction? Show yo...

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The marginal damage averted from pollution cleanup is MD = 200 – 5Q. The total cost associated with pollution cleanup is TC = 10Q + 0.5Q^2. a. What is the optimal level of pollution reduction? Show yo...