I am in environmental economics and working on practice problems for an upcoming

Question

I am in environmental economics and working on practice problems for an upcoming exam. The yellow is what I think the answers are but I am not sure if I am moving in the correct direction. The purple highlighted part is one that I can't between the two answers.

Consider the following graph of a single producer's decision when faced with an emissions tax for questions 10 & 11 S/unit MÇa(X) max 10. Under an emissions tax, which of the following areas represents the total tax bill paid by the firm? A. B B. C C. B+C . B+C+D E. A+B+C+D 11. Under an emissions tax, which of the following areas represents the total cost of the emissions tax policy for the firm? A. B B. C C. B+C D. B+C+D E. A+B+C+D

Explanation / Answer

Ans

10 c is right. X dash X max is taxed at the rate of t

11 B+c. Area under curve but D is not incurred

12

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