Draw a MAC curve in the diagram below, making sure a MAC of 10 and an emissions of 20 are on the curve. Draw the curve so that it is relatively elastic. MAC in $ 10 10 a. 20 Q of emissions Explain why controlling emissions with a tax is difficult. (What happens if you set the tax higher or lower?) b. Suppose the emissions tax were 10. Explain why raising the tax would be a poor way to increase tax revenues.

Draw a MAC curve in the diagram below, making sure a MAC of 10 and an emissions of 20 are on the curve. Draw the curve so that it is relatively elastic. MAC in $ 10 10 a. 20 Q of emissions Explain why controlling emissions with a tax is difficult. (What happens if you set the tax higher or lower?) b. Suppose the emissions tax were 10. Explain why raising the tax would be a poor way to increase tax revenues.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter22: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 4CQ

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