When MC= 10 + 0.4X, MR=30 - 0.6X, damage borne by society is 10 in the case of externality, find the government revenue when she interferes the externality.
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JNU SSS 2021 Question 30: Market failure, externalities and public goods
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Market failure, externalities and public goods has come up 114 times in 7 exams since 2006.
What this question tests
This question is on Pigouvian taxes and corrective policy, part of Market failure, externalities and public goods in Microeconomics.
Using taxes or subsidies to make people face the social cost of their actions.
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