750 permits b. How many pollutants should be cleaned up every year? 250 units c. Assume that there are 2 coal power plants, and that the marginal benefit of abatement and the marginal costs are as followed:

750 permits b. How many pollutants should be cleaned up every year? 250 units c. Assume that there are 2 coal power plants, and that the marginal benefit of abatement and the marginal costs are as followed:

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

Show me the step for the given answers...

3. Country X has carbon emission of 1000 units per
year. The country is involved with Paris Agreement
and will strive to reduce the emission of pollutants
by 25%. The country has decided that the
appropriate strategy is a permit system. (These
problems are all sequential)
a. How many permits should the government
provide?
750 permits
b. How many pollutants should be cleaned up
every year?
250 units
c. Assume that there are 2 coal power plants, and
that the marginal benefit of abatement and the
marginal costs are as followed:
MBAbatement = 1000 – 1.75QAbatement
МСдbatement,A
= Qabatement,A
МСAbatement,B
3QAbatement,B
Find the number of pollutants that would be
abated by firm A and firm B!
Firm A -> 187.5 units , Firm B -> 62.5 units
d. Find the equilibrium price for the permit
187.5

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