Your neighbor likes to blast 1970's rock music and the louder the better.The loud music imposes a cost on you because it disrupts your study of economics.Let D stand for the volume of his music in decibels,B for his benefits and C for your costs,where B and C are in dollars.For any given volume,D,your neighbor's benefit is
and your cost is
What is the efficient Pigouvian tax?
A) $0.75 per decibel
B) $0.29 per decibel
C) $0.24 per decibel
D) $0.25 per decibel
Correct Answer:
Verified
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