Consider the case of greenhouse gas (GHG) sequestration (removal from the atmosphere) as a public good. Suppose there are 100 identical countries, each of which has an identical inverse demand function for carbon removal given by: p=30- QD where Qp is the number of tons of GHGs removed from the atmosphere, and p is the marginal willingness to pay for removing carbon. Assume the marginal cost of sequestering GHGs is constant and $25 per ton. What is the total net benefit to all countries of sequestering the optimal amount of GHGs?

Consider the case of greenhouse gas (GHG) sequestration (removal from the atmosphere) as a public good. Suppose there are 100 identical countries, each of which has an identical inverse demand function for carbon removal given by: p=30- QD where Qp is the number of tons of GHGs removed from the atmosphere, and p is the marginal willingness to pay for removing carbon. Assume the marginal cost of sequestering GHGs is constant and $25 per ton. What is the total net benefit to all countries of sequestering the optimal amount of GHGs?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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