May 31, 2016

Homework Help: Econ - help please

Posted by Sushmitha on Monday, November 14, 2011 at 10:03pm.

demand for sulfur dioxide by coal-fired electricity electricity producers is: P= 1,000 - 16Q where Q is quantity of sulfur dioxide measured in thousands of tons, and P is price per ton of sulfur dioxide.

a)With no policies or restrictions on sulfur emisssions, how much sulfur will be emitted by coal-fired utilities (hint: what is the price of sulfur emissions to electricity producers with no regulations?

b)Economists have determined that the socially optimal quantity of sulfur emissions is 50,000 tons. If the govt wanted to tax sulfur emissions, what would be the amount of the tax that would result in the socialy optimal level of emissions?

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