Two firms, A and B, each currently dump 70 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into theriver. It costs Firm A$150 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $75 for each ton of pollution that it eliminates before it reaches the river. The government gives each firm 30pollution permits. Government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. What is the total cost of reducing pollution if firms are not allowed to buy and sell pollutionpermits from each other? What is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other?O $6000; $3000O $9000; $6750O $4500; $2500O $9000; $9000

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s Firm A $150 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $75 for each ton of pollution that it eliminates before it r rmits. Government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. What is the total cost of reducing pollution n each other? What is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? $3000 $6750

s Firm A $150 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $75 for each ton of pollution that it eliminates before it r rmits. Government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. What is the total cost of reducing pollution n each other? What is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? $3000 $6750

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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