Following are the marginal abatement costs of three firms . Suppose each firm is currently emitting 10 tons / week , so the total emissions are 30 tons / week . Suppose we wish to reduce total emissions by 50 % , to 15 tons per week . The following table provides marginal abatement costs for each firm . a ) What is the total cost if each firm cuts total emission by 50 % from their current levels . b ) What is the total cost if the total emissions decrease by 50 % ( to 15 tons per week ) that meets the equi - marginal principle . c ) From the society's point , which method of reducing ( a or b above ) emissions is better ? Provide a reason .
Following are the marginal abatement costs of three firms . Suppose each firm is currently emitting 10 tons / week , so the total emissions are 30 tons / week . Suppose we wish to reduce total emissions by 50 % , to 15 tons per week . The following table provides marginal abatement costs for each firm . a ) What is the total cost if each firm cuts total emission by 50 % from their current levels . b ) What is the total cost if the total emissions decrease by 50 % ( to 15 tons per week ) that meets the equi - marginal principle . c ) From the society's point , which method of reducing ( a or b above ) emissions is better ? Provide a reason .
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Following are the marginal abatement costs of three firms . Suppose each firm is currently emitting 10 tons / week , so the total emissions are 30 tons / week . Suppose we wish to reduce total emissions by 50 % , to 15 tons per week . The following table provides marginal abatement costs for each firm .
a ) What is the total cost if each firm cuts total emission by 50 % from their current levels .
b ) What is the total cost if the total emissions decrease by 50 % ( to 15 tons per week ) that meets the equi - marginal principle .
c ) From the society's point , which method of reducing ( a or b above ) emissions is better ? Provide a reason .
Transcribed Image Text:Emiss
ions
10 9 8 7 6 5 4 3 2 1 0
(tons/
week)
МАС
Firm 0
1($/
ton)
Firm 0
2 (S/
ton)
Firm 0
3(S/
ton)
4
8.
12 16 20 24 28 36 46 58
1
4
6.
8.
12 20 24 28 36
1
4
7
8.
10
3.
2.
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