Unformatted text preview: What is the deadweight loss from the monopoly? Shade it in on the graph with ////. c. Suppose that the industry emits air pollution that damages society at the rate of $10 per unit of output. Calculate the Pareto optimum and show it on the graph. d. Now what is the monopoly’s deadweight loss with respect to the Pareto optimal point? Show it on the graph with \\\\. e. Suppose that a regulator sets an emission fee equal to $10 per unit. Calculate the monopoly’s profit-maximizing point. Calculate the deadweight loss and show it on the graph with ::::. f. If a market is already distorted by the presence of a monopoly, is a Pigouvian emission fee good for society? Why or why not?...
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This note was uploaded on 04/02/2010 for the course ECON Econ 115 taught by Professor Kolstad during the Spring '10 term at UCSB.
- Spring '10
- Environmental Economics