Assume we define the market as air quality. For simplicity, assume Texas has two oil and gas companies, Company 1 and Company 2. Company 1 emits 10 units of air pollution and Company 2 emits 20 units of air pollution. The government sets the optimal abatement standard at 10 units or Ast=10. The firm's marginal abatement cost functions are given as follows: MAC1= 16+0.5A1 MAC2= 10+2.5A2

Assume we define the market as air quality. For simplicity, assume Texas has two oil and gas companies, Company 1 and Company 2. Company 1 emits 10 units of air pollution and Company 2 emits 20 units of air pollution. The government sets the optimal abatement standard at 10 units or Ast=10. The firm's marginal abatement cost functions are given as follows: MAC1= 16+0.5A1 MAC2= 10+2.5A2

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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