How much tax should the state of paraguay impose

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The Government of Paraguay considers introducing a tax on pollution. They are thinking to make polluters pay an amount T (tax) for every ton of carbon they emit. If the government does implement the policy, the extra costs imposed on producers will be: C = 700 – 2T3 + 15T2 -20T. On the other hand, if the tax is introduced, citizens of Paraguay will be able to enjoy a cleaner environment which will reflect in better health. Thus the total benefits of such policy will be: B = 1800 – 5T3 + 3T2 +10T. How much tax should the state of Paraguay impose?

Reference no: EM131005350

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