The external marginal cost of producing coal is MCexternal = 4Q while the internal marginal cost is MCinternal = 4Q. The inverse demand for coal is given by P=1800 - Q. If the government taxed output at $4 per unit, what would a competitive industry produce?
The external marginal cost of producing coal is MCexternal = 4Q while the internal marginal cost is MCinternal = 4Q. The inverse demand for coal is given by P=1800 - Q. If the government taxed output at $4 per unit, what would a competitive industry produce?
Chapter28: Antitrust And Regulation
Section: Chapter Questions
Problem 7E
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