Industrial production of goods creates pollution that damages the environment.Suppose the marginal social cost of pollution can be represented by the function MSC = 2T, where T represents tons of pollution.Suppose the marginal social benefit of pollution can be represented by the function MSB = 1000 - 2T.a) In an unregulated market, how many tons of pollution will be emitted?
b) Solve for the socially optimal number of tons of pollution.c) What is the Pigouvian tax that will reduce pollution to the optimal level?

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The Answer of Industrial production of goods creates pollution that damages the environment.Suppose the marginal social cost of pollution can be represented by the function MSC = 2T, where T represents tons of pollution.Suppose the marginal social benefit of pollution can be represented by the function MSB = 1000 - 2T.a) In an unregulated market, how many tons of pollution will be emitted?
b) Solve for the socially optimal number of tons of pollution.c) What is the Pigouvian tax that will reduce pollution to the optimal level?

Industrial Production of Goods Creates Pollution That Damages the Environment