The equations for the marginal emissions damages and marginal emissions benefits (MAC) of an industry are known and described by the following equations:
MED = and MEB = 175 - 5
Where E is pounds per year.
a. A tax is imposed on the industry to account for the environmental damages associated with production activities. What is the efficient tax rate?
b. Assuming the same tax as in part (a), what is the government revenue from the tax?