Illustrate and show the welfare loss b in an effort

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Unformatted text preview: emand and supply curves have their usual shapes. (a) will the market produce the allocatively efficient quantity of coal? Illustrate and show the welfare loss. (b) In an effort to produce the allocatively efficient quantity of coal, the government decides to require coal mining firms to pay a $100,000 licensing fee. What will happen to the equilibrium price and quantity of coal in the short- run? (c) Is the governments decision in Part (b) the correct policy decision? Public Goods: (March 2013) Q2. Ten p...
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