2. There are four firms in the widget market. Each of them emits five units of yuck, which are not currently regulated by the government. Each firm's total cost of abatement (cleaning up its yuck emissions) is listed in the table below. The government has just passed a new law limiting the total amount of allowable yuck to 10 units (for the entire industry). a. How much should each firm abate and why? Keep in mind that total emissions cannot exceed 10. b. What is the industry's total cost of abatement based on your allocation in a)? 0 2 3 4 Total cost of abatement 62 42 28 16 6 95 27 13 5 76 34 21 10 99 27 1 54 18 3 Each firm's total yuck emissions Firm A Firm B Firm C Firm D Firm E S 54 49 58 30 289

2. There are four firms in the widget market. Each of them emits five units of yuck, which are not currently regulated by the government. Each firm's total cost of abatement (cleaning up its yuck emissions) is listed in the table below. The government has just passed a new law limiting the total amount of allowable yuck to 10 units (for the entire industry). a. How much should each firm abate and why? Keep in mind that total emissions cannot exceed 10. b. What is the industry's total cost of abatement based on your allocation in a)? 0 2 3 4 Total cost of abatement 62 42 28 16 6 95 27 13 5 76 34 21 10 99 27 1 54 18 3 Each firm's total yuck emissions Firm A Firm B Firm C Firm D Firm E S 54 49 58 30 289

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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