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Topic 2: Production Externalities

Topic 2: Production Externalities. TD ($). ? an additional unit of E causes more damage if E is already high. TD. Suppose (?E/?Q) is constant in Q, but MD is increasing in E True if TD? as E?, but at an increasing rate. ? given ? E, ? TD 2 > ? TD 1. ? TD 2.

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Topic 2: Production Externalities