Following are the MACs of three firms, related to the quantity of emissions. Each firm is now emitting 10 tons/week, so total emissions are 30 tons/week. Suppose we wish to reduce total emissions by 50 percent, to 15 tons per week. Compare the total costs of doing this: a. If the amount of decrease in emissions for each firm is equal. b. If each firm has a decrease that meets the equimarginal principle. Emissions (tons/week) 10 9 8 7 6 5 4 3 2 1 0 Marginal Abatement Costs: Firm 1 ($/ton) Firm 2 ($/ton) Firm 3 ($/ton) 12 16 694 243 822 411 000 20 24 28 36 46 58 285 226 20 12 20 24 7 38 28 36 8 9 10

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