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Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 18 - 2E_1 МАС_2 %3D 12 - Е_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: %3D MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per-unit subsidy to abatement. The total (or combined) subsidy payment to the two firms is $. Answer:

Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 18 - 2E_1 МАС_2 %3D 12 - Е_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: %3D MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per-unit subsidy to abatement. The total (or combined) subsidy payment to the two firms is $. Answer:

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 18 - 2E_1 МАС_2 %3D 12 - Е_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: %3D MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per-unit subsidy to abatement. The total (or combined) subsidy payment to the two firms is $. Answer:
Transcribed Image Text:Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 18 - 2E_1 МАС_2 %3D 12 - Е_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: %3D MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per-unit subsidy to abatement. The total (or combined) subsidy payment to the two firms is $. Answer:
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