Consider a chemical plant that discharges toxic fumes over a nearby community. Toreduce the emissions of toxic fumes the firm can install pollution abatement devices.The figure below shows the marginal benefit and the marginal cost from reducing thetoxic fumes emissions.Marginal benefitand marginalcosts in $A + BA + B + CB+CPo08CBAMarginalabatementcost9Marginalbenefits ofreduction101112 12.5Reductions in toxic fumes emissions(millions of tons per year)Suppose the emissions reduction target is currently established at 8 million tons.What is the area that represents the cost of eliminating an additional 1 million tons?

Abatement cost is the cost of reducing pollution. Marginal abatement cost is the cost of reducing…

Consider a chemical plant that discharges toxic fumes over a nearby community. To reduce the emissions of toxic fumes the firm can install pollution abatement devices. The figure below shows the marginal benefit and the marginal cost from reducing the toxic fumes emissions.

Consider a chemical plant that discharges toxic fumes over a nearby community. To reduce the emissions of toxic fumes the firm can install pollution abatement devices. The figure below shows the marginal benefit and the marginal cost from reducing the toxic fumes emissions.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider a chemical plant that discharges toxic fumes over a nearby community. To
reduce the emissions of toxic fumes the firm can install pollution abatement devices.
The figure below shows the marginal benefit and the marginal cost from reducing the
toxic fumes emissions.
Marginal benefit
and marginal
costs in $
A + B
A + B + C
B+C
Po
0
8
C
B
A
Marginal
abatement
cost
9
Marginal
benefits of
reduction
10
11
12 12.5
Reductions in toxic fumes emissions
(millions of tons per year)
Suppose the emissions reduction target is currently established at 8 million tons.
What is the area that represents the cost of eliminating an additional 1 million tons?

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