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+30. The market demand curve is , while the marginal social cost curve is MSC = 2Q + 30. What level of emissions fee would achieve the socially optimal level of output?
A) $54.
B) $32.
C) $12.
D) $10.
Correct Answer:
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