The efficient level of price for this industry

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Reference no: EM131424746

A paper mill’s Marginal Abatement Cost is MAC = 900-0.75E, and its Marginal Damage is MD = 200 + E.

(1) What is the socially efficient level of emissions and the efficient level of “price” for this industry? Show how can you compute the social efficient equilibrium and show it in graph.

(2) What is the total social cost at the socially efficient level of emissions? (Total Social Cost = Total Damage + Total Abatement Cost, thus: TSC=TD+TAC. Be careful when dealing with TAC because it’s reading from right to left)

Please explain in steps

Reference no: EM131424746

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