22 Jul WHAT IS THE NEW SOCIALLY OPTIMAL QUANTITY OF POLLUTION?
A factory benefits from discharging effluent q into a lake. The marginal benefit function is given Show more A factory benefits from discharging effluent q into a lake. The marginal benefit function is given by 60-2q. The pollution causes damages to two nearby communities. The marginal damages to Community A are 1q. The marginal damages to community B are 2q. Now two other factories start producing in the area and benefit from polluting too. For each the marginal benefit from pollution is given by 60-4q. What is the new socially optimal quantity of pollution? Show less
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