### Decided to impose pollution tax on its polluting firms

##### Reference no: EM13815613

Urban labor markets (Be sure to provide appropriate graphics.)

Consider a city that has decided to impose a pollution tax on its polluting firms. How would wages and employment be affected? How does the result depend upon the elasticity of supply of labor with respect to environmental quality? The wage elasticity of demand for labor by the city’s non-polluting firms? How would wages and employment be affected by restrictions on when companies could close plants or offices?

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