Problem
The demand for air-polluting backhoes in Peoria is PD = 48 - Q. The air pollution creates a marginal external cost according to MEC = 2 + Q. Supply of backhoes is given by PS = 10 + cQ. If the socially efficient level of backhoes is Q* =12, find the tax that induces the socially efficient level of backhoes in equilibrium.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.