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  • Cignit: Thene

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    P Boss
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    1. A paper plant situated on the banks of a river is polluting the river significantly, damaging crops and causing health issues for the local community. 2. There is a social cost to the pollution being generated by the plant at equilibrium that is not being considered by the plant. 3. Government intervention is needed to address the negative externalities of pollution and provide subsidies to encourage the plant to invest in pollution control machines to prevent pollution beyond optimal levels.

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    EEP

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    1. A paper plant situated on the banks of a river is polluting the river significantly, damaging crops and causing health issues for the local community. 2. There is a social cost to the pollution being generated by the plant at equilibrium that is not being considered by the plant. 3. Government intervention is needed to address the negative externalities of pollution and provide subsidies to encourage the plant to invest in pollution control machines to prevent pollution beyond optimal levels.

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    © All Rights Reserved
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    6 views2 pages

    Cignit: Thene

    Uploaded by

    P Boss
    1. A paper plant situated on the banks of a river is polluting the river significantly, damaging crops and causing health issues for the local community. 2. There is a social cost to the pollution being generated by the plant at equilibrium that is not being considered by the plant. 3. Government intervention is needed to address the negative externalities of pollution and provide subsidies to encourage the plant to invest in pollution control machines to prevent pollution beyond optimal levels.

    Copyright:

    © All Rights Reserved
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    of 2

    AA Thene becase o

    pol lun'on
    cigniticant ain
    igni and waten

    cop pen plantt situated on the banks o


    subannamekha

    Mvern. taumeMA
    Crops twene alo damaqeo becuue a
    Pollwbon . So thene is es af social uue ane, Th knd
    omanet fatlwe bnouun an nega tve extem natity
    nom preducen" on negatve prQduchon extennai ky
    Pri'ce
    DWL MSc
    Meel MPga Haug inal
    , MP Pntvdte Beneut
    s , 2 Maug inal Sotual
    MsPe Coth
    MSB Maugindl o u o
    (G) D, a
    Mp MSB benet|
    P Maneiral Pewate
    >
    ueny CoJ
    Dwt MSel@ e >hin l?e

    From the
    S 8
    iquue it Can be seen that the
    polt
    polt hoon
    uhonbeng genenakeð by oppen quonthy o
    t e Herte plont at equelrbnium
    equeltbnium
    eQuili'buum pnite fa H0wevn it
    doenot consider tle
    Orn cost
    mauginal cou'al ott beinq paid ar
    soBCteH be caAa a po uh'on. Ti's So
    on
    so val
    ual
    cost wa n he
    onm o Poltution nduteð health
    o well o haraud
    dam ae al cnop.
    The optbmal
    antity
    quantity thoce sAould be aceeptable s so alten cont ideniy
    mau gtnal sotial cost. Thenafone thene is a dead ue iqht los t tI" Seen.
    7h b'en
    aa
    Cene et maut el kailume due to neqabve phodut
    entre mau'y.

    6 The ovemment tntenuenton needeð to counten negaPuve enternally


    Un this Case Ghovenment ehoult provde subsid e on h e peteb pollutn'oy
    contre machineies onden to pnevent pollubon beyond opkmad level.

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