MBy = 600 – ( Ey / 3 ) Note that these marginal benefit figures can be interpreted as marginal cost of a emission down to levels Ex and Ey. Government regulators want to reduce total sulfur dioxide emissions to a total o tons. a) If the government imposes the same standard of 900 tons maximum emi both firms what would be the total cost of abatement (calculated as the a marginal benefits forgone)? b) If the government distributed 900 tradable pollution permits (one ton ea each firm what would be the final allocation of these permits after the fi them? What would be the total cost of abatement in this latter case?

MBy = 600 – ( Ey / 3 ) Note that these marginal benefit figures can be interpreted as marginal cost of a emission down to levels Ex and Ey. Government regulators want to reduce total sulfur dioxide emissions to a total o tons. a) If the government imposes the same standard of 900 tons maximum emi both firms what would be the total cost of abatement (calculated as the a marginal benefits forgone)? b) If the government distributed 900 tradable pollution permits (one ton ea each firm what would be the final allocation of these permits after the fi them? What would be the total cost of abatement in this latter case?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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