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Suppose That an Industry Emits a Chemical That Pollutes the Ground

Question 24

Multiple Choice

Suppose that an industry emits a chemical that pollutes the ground water. Without considering the effects of the pollution, the industry has a marginal private cost curve of MPC =Q+30= Q + 30 . The market demand curve is P=60QP = 60 - Q , while the marginal social cost curve is MSC=2Q+30\mathrm { MSC } = 2 \mathrm { Q } + 30 . What is the socially optimal emissions standard?


A) 15 .
B) 10 .
C) 5 .
D) 0 .

Correct Answer:

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