| Question |
|---|
| a. Show (graphically) that if regulators attempt to achieve what they believe to be an efficient amount of brimstone, it doesn’t matter whether they attempt to limit the quantity of brimstone, or set what they believe to be an efficient tax. b. Show graphically that the elasticities of the marginal abatement cost and marginal cost of pollution are irrelevant to the choice of a quantity or price intervention. c. Show that the results you demonstrated in (a) and (b) also hold if regulators underestimate the amount of marginal pollution cost brimstone causes. |
