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Suppose That an Industry Emits a Chemical That Pollutes Ground MPC=Q+30M P C = Q + 30

Question 37

Multiple Choice

Suppose that an industry emits a chemical that pollutes ground water. Without considering the effects of the pollution, the industry has a marginal private cost curve of MPC=Q+30M P C = 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 level of emissions fee would achieve the socially optimal level of output?


A) $54\$ 54 .
B) $32\$ 32 .
C) $12\$ 12 .
D) $10\$ 10 .

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