There is concern that CFCs, a chemical by-product of refrigeration, are destroying Earth's protective ozone layer, leaving us more vulnerable to cataracts and skin cancer.Suppose each air conditioner creates 10 pounds of CFCs.The demand and supply of air conditioners follow:
What will be the free market price and quantity, and what will be the price and quantity if the government forces suppliers to pay a $100 tax for each air conditioner produced?
Definitions:
Property Rights
The legal rights to use, control, and derive benefit from property, whether it is tangible or intangible.
Privately Owned
Something that is owned by individuals or corporations rather than the government or the public.
Pollution Liability
Legal responsibility for damages caused by releasing pollutants into the environment.
Pollution Emissions
The release of pollutants into the environment, typically from industrial activity, transportation, and other sources harmful to human health and the planet.
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