Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Pigouvian Tax
An economic solution to the problem was evolved as early as in the 1920s by the well- known British economist Arthur Pigou in the form of pollution tax popularly known as Pigouvian tax. According to Pigou, the social damage or the social cost imposed by a firm by its pollution activity on society may be neutralised by imposing a pollution tax on the firm. The rate of the tax, according to him is equal to the marginal environmental cost or marginal social damage by the polluting firm on society.
We explain the situation in the below diagram where MCs, is the social marginal cost while MCp, is the private marginal cost of production of a good. As more output is produced, MCs, increases with the level of pollution. The demand for the pollution good is given by the demand curve DD' (representing marginal revenue curve, MR). As per market mechanism, the equilibrium output is q1 and price is P1 where MCp = MR. Socially optimum level of output, however, is q* and price P*, where MCS = MR. If the producer were made to pay for the social costs also, equilibrium output would have been at the level q*. We observe from below diagram that the difference between MCs, and MCp, at the socially optimum level output is 'ac'. In order to internalize the externalities Pigou suggests imposition of a tax t per unit of output where t = ac. Here it is assumed that pollution emitted per unit of output remains unchanged as level of output changes.
Diagram: Pigouvian Tax
what could I write for pharigraph 2 on why a bully bullies
Probelm 1: (a) What are the main roles of Government in the economic development of a country? (b) What are some of the emerging issues affecting the role of Government?
Explain the stages and various coordination mechanisms involved in policy processes. Discuss various factors that influenced the agenda setting in policy processes.
Question 1: ‘Public Relations professionals must understand how public opinion is formed, how it evolves from people's attitudes, and how it is influenced by communication.' D
how to make summarize the basic tenets of the arguments in the case of Mark Davis 2010 of journal of liberty?
How burden of public debt is transferred to future generations through reduced capital formation?
We live in a globalized world economy. Our policy agenda, as we have discussed earlier have changed enormously to include environment, humanity in general as well as the conventio
Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4
There has been a long history of research on ‘the policy process' which is ‘closely connected to efforts to examine the nature of power in society and to specify the necessary cond
types of welfare economics
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd