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A small country both produces and imports bread, the world price of which is $1 per...

A small country both produces and imports bread, the world price of which is $1 per loaf. Production of the bread causes a pleasant smell, which the producers of bread are unable to charge for, and which the people in the country enjoy. In fact, it has been ascertained that the value of this smell to society is $0.50 per loaf.  

1. Show and explain why, in the absence of any other policy, a tariff on bread in this country might be beneficial to the society as a whole.  

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