Explain your answers and why in details. Suppose that regulators set a tax equal

Question

Explain your answers and why in details.

Suppose that regulators set a tax equal to $4 per unit of gunk per day. In that case, Plant B would pay in clean-up costs and taxes Relative to command-and-control regulation, incentive-based approaches increase the incentives for discovering new pollution control technology by making it costly for firms to pollute, even below the standard. doing away with the requirement to use a certain type of technology. forcing the marginal costs of reduction at each plant to be equal. a and b. a, b and c.

Explanation / Answer

5.Beacuse in plant B Polution per unit is 12/2= 6

Tax set $ 4 per unit so cleanup tax is=6X4= $ 24

6.a) It will make costly For plant A beacause its low standare the polution per unit is very high( MC-9)

b)

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