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Business, 13.06.2020 21:57 pettismayersjoy3le8

Firm 1 produces output x with a cost function C1(x) = x 2/200. Firm 2 produces output y with a cost function C2(x, y) = y 2 100 − 2x. Both firms face competitive product markets, with respective prices px = 4 and py = 5. At what rate should x be taxed or subsidized if the government wants the firms to produce the socially optimal level of each good?

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Firm 1 produces output x with a cost function C1(x) = x 2/200. Firm 2 produces output y with a cost...

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