question archive Assume two individuals, living by a lake, pollute the water
Assume two individuals, living by a lake, pollute the water
Subject:EconomicsPrice: Bought3
Assume two individuals, living by a lake, pollute the water. The marginal damage functions of two households is given by MD1=2E and MD2=6E. Because pollution is a non-rival and is bad, the aggregate marginal damage function is found by the vertical summation of the individual damage functions. Thus, MDt=8E, where MDt is the marginal damage total. The marginal abatement cost is MAC=20-2E
If there is no regulation, calculate the uncontrolled level of pollution?
