Solve clearly.. 1. The marginal cost to society of fertilizer runoff is described by the equation M CP = 3Q — 200, Where Q is measured in ppm of runoff.

Solve clearly.. 1. The marginal cost to society of fertilizer runoff is described by the equation
M CP = 3Q — 200, Where Q is measured in ppm of runoff. The abatement cost is
estimated by regulators to be MA C8 = 360 — Q, however, unbeknownst to the regulators, the actual abatement costs are MAC = 400 — Q. In this case, is it better if the regulators
use a quantity, or a price mechanism to mitigate the externality?

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