Posted by Anil on Monday, November 14, 2011 at 7:51am.
If one adds a tax ,then the private cost curve moves upward to the social cost curve, but will not cross it ever, it could be colinear. There would not be an optimals solution of attendance, as the marginal revenue would always equal mariginal costs.
So the tax to get to this is the difference between the private cost curve and the social cost curve AT ANY POINT, as it is constant.
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