Essay
Assume the social marginal benefit of remote-control drone flights is given by SMB = 200 - 2Q and the marginal cost is given by MC = 3Q + 50. The government wants to correct the negative externality associated with remote-control drone flights by taxing operators $20 per flight. What deadweight loss is associated with unrestricted remote-control drone flights if the proposed tax accurately reflects their marginal external costs?
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