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What tax t should it set to achieve the social optimum

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Question 1: The private marginal benefit associated with a product's consumption is PMB = 350 - 4Q and the private marginal cost associated with its production is PMC = 6Q. Furthermore, the marginal external damage associated with this good's production is MD = 4Q. To correct the externality, the government decides to impose a tax of T per unit sold. What tax T should it set to achieve the social optimum?

Reference no: EM132538610

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