Consider the various provisions in RCRA that discourage land-based waste disposal. Identify and explain one aspect of the law that is command- and-control in approach and one that is incentive- based.
Suppose that prior to the land restrictions of 1984, the market for land disposal was modeled as follows:
D = MPB = 80 - 2L S = MPC = 20 + 2L
where L is thousands of tons of landfilled hazard- ous waste, and the dollar values are per ton.
When the 1984 restrictions decreased the supply of land disposal services, assume that the marginal private costs (MPC) of production decreased to MPC' = 32 + 2L.
a. Based on this model, quantify the decrease in land disposal accomplished by the restrictions.
b. Graphically show the qualitative effect on total external costs in the land disposal market.