Assume the production of coal involves

Assume the production of coal involves the generation of a negative externality.
i.	Explain how the equilibrium level of output would be determined in the market for coal, assuming no attempt is made to internalise the externality. Is that equilibrium efficient? Use a diagram(s) as part of your explanation.
ii.	What is a Pigovian Tax? Explain how the imposition of a Pigovian Tax could alter the equilibrium in this market. How does the tax impact on the efficiency of this market? Use a diagram(s) as part of your answer. You are free to augment the diagram you used in (a) in your answer to (b).
iii.	What other solutions could be used to remedy this negative externality? You do not need to describe these remedies in detail.

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