Illustrate graphically, labeling where and how fee imposed

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a. To help fight the problem of nonpoint source pollution associated with agricultural runoff, your state is contemplating charging an annual fee of $500 to every seller of pesticides. If this fee is to achieve an efficient solution, state specifically according to externality theory

(a) what the $500 fee must represent and (b) in which market.

b. Illustrate graphically, labeling where and how the fee is imposed.

Reference no: EM13914792

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