Refer to the Slide 23 of Chapter 5 Lecture note. Pick any amount of emission which is greater or less than E*=10 (also it must be less than Emax). And then prove that the emission at 10 tonnes per month is the best (most efficient). Proving Social Efficiency yields the lowestsocial costTotal social costs (the total costs of damages (area b) plus the totalcosts of abatement (area a)) are minimized at the level ofemissions where MAC-MD (At 10 units of emissions)If emissions levels are higher or lower than the efficient level, thesum of the total costs of damages plus the total costs ofabatement is higher than at the efficient level• For example, at 15 units of emission, total social costs equal totaldamages (a + b + c). There are no abatement costs at this point,but the damages to society are very high. Emissions that causehigh damages can be abated at low cost, improving social welfareLO6© 2015 McGraw-Hill Ryerson Ltd.23

Social efficiency in the framework of pollution control refers to the degree of emissions reduction…

Answered: Pick any amount of emission which is…

Pick any amount of emission which is greater or less than E*=10 (also it must be less than Emax). And then prove that the emission at 10 tonnes per month is the best (most efficient).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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