$4.00 Marginal Cost (per ton) of pollution reductionton $3.00 $2.00 $1.00 O a). $1.10 Ob). $0.90 Figure 1 O c). $0.60 25% Od). either (b) or (c) above 50% 75% mc plant 1 Assume now that each plant in Figure 1 normally emits 100 tons of pollutant (so a 50% reduction means a reduction of 50 tons.). Assume the plants are issued permits for 50 tons of pollutant. Plant 2 might agree to sell one permit to Plant 1 (and Plant 1 would agree to pay) a price of... mc plant 2 100% Pollution reduction.

$4.00 Marginal Cost (per ton) of pollution reductionton $3.00 $2.00 $1.00 O a). $1.10 Ob). $0.90 Figure 1 O c). $0.60 25% Od). either (b) or (c) above 50% 75% mc plant 1 Assume now that each plant in Figure 1 normally emits 100 tons of pollutant (so a 50% reduction means a reduction of 50 tons.). Assume the plants are issued permits for 50 tons of pollutant. Plant 2 might agree to sell one permit to Plant 1 (and Plant 1 would agree to pay) a price of... mc plant 2 100% Pollution reduction.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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