\table[[],,, Pollute, Use FiThere are two firms whose factories sit alongside a lake. It costs each firm $2,100.00 to install filters to avoid polluting the lake. Because both firms utilize the lake's water to produce goods, a polluted lake hurts their production process and increases their costs. Assume that the cost to each firm of a polluted lake is $1400.00 times the number of polluting firms. Fill in the cost matrix based on the above information. Note: Include negative signs because this problem refers to costs.Which of the following are true about the equilibrium in a one-shot game? Choose one or more: A. Both firms pollute. B. Only firm 2 pollutes. C. The equilibrium is not Pareto optimal. D. Neither firm pollutes. E. Only firm 1 pollutes. Pollute Firm 1 Use Filter Firm 2 Pollute Use Filter

#8. If government regulation forces firms in an industry to internalize the externality, then we can expect the equilibrium price of the good to ________ and the equilibrium quantity to ________. a. increase; increase b. increase; decrease c. decrease; decrease d. decrease; increase e. increase; remain unchanged

A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $3,000 per diamond, and the demand for diamonds is described by the following schedule: see attached If there were many suppliers of diamonds, the price would be $________per diamond and the quantity sold would be __________diamonds.   If there were only one supplier of diamonds, the price would be _________per diamond and the quantity sold would be_________diamonds.   Suppose Russia and South Africa form a cartel. In this case, the price would be _________________per diamond and the total quantity sold would be __________diamonds. If the countries split the market evenly, South Africa would produce_____________diamonds and earn a profit of.   If South Africa increased its production by 1,000 diamonds while Russia stuck to the cartel agreement, South Africa's profit would _increase or decrease________   to.   Why…

Now assume that Super Polluter faces competition with the entrant of a new firm, Reducing our Footprint, Inc. The two fırms together split the market and total production, so now they are together emitting 80 tons of carbon dioxide (40 tons each). The EPA sets a goal to reduce these emissions by 40 tons, so they issue pollution permits for the remaining 40 tons only (20 to each firm). The costs of pollution reduction for both firms are shown in the graph below. Pollution Reduction Costs per Unit MCRSP $1,000 MCRROE $400 $300 A В ROF 0 5 10 15 20 25 30 35 40 SP 40 35 30 25 20 15 10 Units of Pollution Reduced • What does it cost Super Polluter (SP) to reduce emissions this time? How about Reducing our Footprint (ROF)? • Assuming the pollution permits are tradable, and the cost of a permit settles at $400, how much will Super Polluter and Reducing our Footprint each reduce their pollution? • Including permit costs/income, what will it cost them? • How much does each firm save relative to…