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Two firms produce a good q and receive a price p = 10 for the good....

Two firms produce a good q and receive a price p = 10 for the good. Firm 1 has marginal costs MC1 = q while firm 2 has marginal costs MC2 = 2q. The production of each unit causes marginal external damage of 2 monetary units. The government wants to limit production with a cap and trade system. What is the optimal cap on total production?

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