Suppose the market for plastic bag is represented by the following equations: Qd = 1000-2p Qs = -20 +2p ic bags are associated with an environmental cost of Php 50 per bag. What is the free-market equilibrium quantity? What is the socially optimal quantity? What can be imposed to correct the externality? (tax / subsidy) By how much hould the amount of the policy be?
Suppose the market for plastic bag is represented by the following equations: Qd = 1000-2p Qs = -20 +2p ic bags are associated with an environmental cost of Php 50 per bag. What is the free-market equilibrium quantity? What is the socially optimal quantity? What can be imposed to correct the externality? (tax / subsidy) By how much hould the amount of the policy be?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 2CQQ
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