Home / Questions / Consider two cities each of which initially experiences 100 tons of pollution per day 50 t...
Consider two cities, each of which initially experiences 100 tons of pollution per day (50 tons from each polluting firm). City T imposes a pollution tax, resulting in an overall pollution reduction of 20 percent and a decrease in equilibrium employment. City U implements a uniform-reduction policy under which each firm cuts its pollution by 20 percent. Which city will experience a larger reduction in equilibrium employment? Illustrate.
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