Suppose that the inverse demand equation isp =100minus2Q and the supply equation isp =2Q.If the price is controlled at $35,this is a price ceiling.
September 3, 2020
[A nation] is “small”, unable to affect world prices. It imports peanuts at the price of $10 per bag.
September 3, 2020

1)Suppose two firms owned by Trump Corporation and Koch Industries arecurrently emitting 8,000 tons of pollution each. Abatement costs for TrumpareMCT = 0.03QT and abatement costs for Koch areMCK = 0.02QK.a.)Consider a pollution standard requiring each firm to reduce pollution by5,000 tons. Calculate pollution reduction costs for each firm. (5 pts)b.)What per unit tax would accomplish the same pollution reduction as thepollution standard in part (a)? Calculate pollution reduction costs for each firm. (5 pts)c.)Calculate the tax paid by each firm. (

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