Imagine a firm's marginal abatement cost function with existing technologies is: MAC = 12 – E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 6 – 0.5E. The adoption costs for the new technology are $6. If the government raises the tax on emissions from $1 to $4, the benefits of adopting the new technologies increase by $ Select one: a. $7.50. O b. $12. O c. $3. O d. $4.5.
Imagine a firm's marginal abatement cost function with existing technologies is: MAC = 12 – E. If the firm adopts new pollution abatement technologies, its marginal abatement cost function will be: MAC = 6 – 0.5E. The adoption costs for the new technology are $6. If the government raises the tax on emissions from $1 to $4, the benefits of adopting the new technologies increase by $ Select one: a. $7.50. O b. $12. O c. $3. O d. $4.5.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Economic
Transcribed Image Text:Imagine a firm's marginal abatement cost function with existing technologies is:
MAC = 12 – E. If the firm adopts new pollution abatement technologies, its
marginal abatement cost function will be: MAC = 6 – 0.5E. The adoption costs
for the new technology are $6. If the government raises the tax on emissions
from $1 to $4, the benefits of adopting the new technologies increase by $.
Select one:
a. $7.50.
O b. $12.
C. $3.
O d. $4.5.
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