(Answered) An important way to reduce water pollution from farms is to

Engineering

An important way to reduce water pollution from farms is to plant a buffer zone of bushes between crops and the water. Economists estimate that for each bush planted there is a $20 gain in reduced pollution. Market supply and demand curves for the bushes are given below.

Price Demand Supply

$50 1,000 5,000

$40 2,000 4,000

$30 3,000 3,000

$20 4,000 2,000

$10 5,000 1,000

a. What is the market clearing equilibrium price and quantity?

b. What is the efficient quantity?

c. How would Pigou propose correcting this inefficiency?

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