ECON 1 Lecture Notes - Lecture 21: Competitive Equilibrium, Externality, Social Cost
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Pollution each flamingo causes competitive equilibrium had negative profits a tax of tax made private cost. 20 external social cost cost command and control regulation and reduce limit. Require certain technologies catalytic converters low sulfur coal 1 natural gas. Costs of cutting back source and not are control sane for each production reduction for further cutbacks once limit no incentive is reached. How to incorporate proper incentives differences and provide. Case power plant old monkey w o regulation emits 3 tons cutting back emissions is costly of sou per day costs of emission reduction. 1 emitting 2 emitting 3 tons ton per day tons per day boo 300 4302 boo per day 6002. Case 2 power plant 2 high tech also emits 3 tons cutting back is less costly w o regulation marginal benefits of emissions emissions. Itonlday tou each cost of regulation better policy b tons 1 day for old smokey.
