Government policies with respect to the recycling
Can you explain how different government policies with respect to the recycling of aluminum and paper might account for these different market outcomes?
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Various government policies could cause these different market outcomes. For example, requiring the use of recycled aluminum in can production could raise its demand; requiring refundable deposits on cans at the time of purchase could give them a value not given to newspapers; giving tax breaks for the use of recycled aluminum and not for recycled newspapers would also encourage demand for aluminum and not for newspapers.
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