FIGURE 12-3

-Refer to Figure 12-3, which represents the market for pulp, the production of which creates dioxin emissions. Suppose the market is currently producing at the profit maximizing point and the government wishes to impose a tax to correct the overallocation of resources caused by the externality. Once the tax is imposed, what will the per unit price of pulp be?

Question

FIGURE 12-3
 
-Refer to Figure 12-3, which represents the market for pulp, the production of which creates dioxin emissions. Suppose the market is currently producing at the profit maximizing point and the government wishes to impose a tax to correct the overallocation of resources caused by the externality. Once the tax is imposed, what will the per unit price of pulp be?

Quizplus · Accepted Answer

The Answer of FIGURE 12-3
 
-Refer to Figure 12-3, which represents the market for pulp, the production of which creates dioxin emissions. Suppose the market is currently producing at the profit maximizing point and the government wishes to impose a tax to correct the overallocation of resources caused by the externality. Once the tax is imposed, what will the per unit price of pulp be?

FIGURE 12-3 -Refer to Figure 12-3, Which Represents the Market for Pulp