As you know, my company has supplied the energy needs of the entire state since 1968! I can’t believe they are demanding that we reduce our emissions! This will force us to pass on the increase in the cost to our customers! Thankfully, the government will be providing a subsidy to offset these costs! The current subsidy is $500 per pound of pollution reduction each day. I have spoken to the engineering department regarding the cost to reduce emissions. They informed me that the daily cost to us is a fixed daily cost of $100 in addition to $30 times the square of the quantity of pounds of pollution reduced each day. Currently, I would like to reduce emissions by 10 pounds of pollutant per day. At this level, what is our marginal cost of reducing emissions to 10 pounds of pollutant per day? With the government subsidy, what would be our net cost for reducing emissions by 10 pounds of pollutant per day? The government would like us to reduce emissions by 20 pounds of pollutants per day. Could we accomplish this with no cost to us? If not, at what reduction level would we have no cost to us?
Mr. Kleppin,
As you know, my company has supplied the energy needs of the entire state since 1968! I can’t believe they are demanding that we reduce our emissions! This will force us to pass on the increase in the cost to our customers! Thankfully, the government will be providing a subsidy to offset these costs! The current subsidy is $500 per pound of pollution reduction each day. I have spoken to the engineering department regarding the cost to reduce emissions. They informed me that the daily cost to us is a fixed daily cost of $100 in addition to $30 times the square of the quantity of pounds of pollution reduced each day. Currently, I would like to reduce emissions by 10 pounds of pollutant per day. At this level, what is our marginal cost of reducing emissions to 10 pounds of pollutant per day? With the government subsidy, what would be our net cost for reducing emissions by 10 pounds of pollutant per day? The government would like us to reduce emissions by 20 pounds of pollutants per day. Could we accomplish this with no cost to us? If not, at what reduction level would we have no cost to us?
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