The average option price per share and market price per share at time of grant is equal each year ($44.69 for Year 2, $49.67 for
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Answer:
$10
Explanation:
We are to account for external costs in production, since we are asked to find optimal tax.
Given:
We now have:
A represents number of aluminum units produced, let's find A, since the margnal cost is $30.
Thus,
Let's equate the private marginal cost with the marginal revenue of each unit in order to achieve this amount of produced units with tax, t.
We have:
Substituting 100 for A above, we have:
30 - t = 20
t = 30 - 20
t = 10
Therefore, the socially optimal tax on aluminum is $10 per unit