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Runoff from agricultural activities is changing the pH of a nearby lake. The runoff reduces the number of fish, causing damage for fisheries. Let Q denotes the volume of runoff. The marginal damage

  1. Runoff from agricultural activities is changing the pH of a nearby lake. The runoff reduces the number of fish, causing damage for fisheries. Let Q denotes the volume of runoff.  The marginal damage, denoted MD, is given by the equation

MD = 4 + 10Q. The marginal benefit (MB) of the runoff is given by the equation MB = 68 - 6Q.


(a) Calculate the efficient quantity of runoff.
(b) What is the efficient fee, in dollars per unit of waste, which would cause the firm to dump only an efficient quantity of waste?
(c) What would be the quantity dumped if the firm did not care about the fishery?

Apr 16 2021 View more View Less

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