There are two power plants in a country and both are damaging to the environment. Together they emit 500 tons of sulfer dioxide per month, but the government would like to reduce emissions to 50 tons (eд+ eg 50). The firms have the following Marginal Abatement Cost Curves: MACA 300-3еA MAC 200-2eB Given that the government wants to use an optimal effluent tax to reduce the total combined level of emissions to 50 tons, what is the optimal number of emissions for firm A under this effluent tax? 40 40 Question 2 Using the information in question 1A, what is the optimal number of emissions for firm B? 10 Question 3 Using the information in question 1C, what is the optimal effluent tax? 180 Question 4 1 pts 1 pts 1 pts Using the information from question 1A, what is the total cost (tax cost abatement cost) for firm A? (hint: you may want to draw a graph to help you answer the question). 12.600
There are two power plants in a country and both are damaging to the environment. Together they emit 500 tons of sulfer dioxide per month, but the government would like to reduce emissions to 50 tons (eд+ eg 50). The firms have the following Marginal Abatement Cost Curves: MACA 300-3еA MAC 200-2eB Given that the government wants to use an optimal effluent tax to reduce the total combined level of emissions to 50 tons, what is the optimal number of emissions for firm A under this effluent tax? 40 40 Question 2 Using the information in question 1A, what is the optimal number of emissions for firm B? 10 Question 3 Using the information in question 1C, what is the optimal effluent tax? 180 Question 4 1 pts 1 pts 1 pts Using the information from question 1A, what is the total cost (tax cost abatement cost) for firm A? (hint: you may want to draw a graph to help you answer the question). 12.600
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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