Suppose the the government has set the trading price of a permit at $126 per permit.Complete the following table with the action each firm will take at this permit price, the amount of pollution each firm will eliminate, and the amount itcosts each firm to reduce pollution to the necessary level. If a firm is willing to buy two permits, assume that it buys one permit from each of theother firms. (Hint: Do not include the prices paid for permits in the cost of reducing pollution.)FirmFirm AFirm BFirm CInitial Pollution PermitAllocation(Units of pollution)222Regulation Versus Tradable PermitsActionProposed MethodRegulationTradable PermitsFinal Amount of PollutionEliminated(Units of pollution)Cost of PollutionReduction(Dollars)Determine the total cost of eliminating six units of pollution using both methods, and enter the amounts in the following table. (Hint: You might needto get information from previous tasks to complete this table.)Total Cost of Eliminating Six Units of Pollution(Dollars)In this case, you can conclude that eliminating pollution iscostly to society when the government regulates each firm to eliminate acertain amount of pollution than when it allocates pollution permits that can be bought and sold.

The total cost is the sum of different costs incurred by the firm in producing goods and services.…

Suppose the the government has set the trading price of a permit at $126 per permit. Complete the following table with the action each firm will take at this permit price, the amount of pollution each firm will eliminate, and the amount it costs each firm to reduce pollution to the necessary level. If a firm is willing to buy two permits, assume that it buys one permit from each of the other firms. (Hint: Do not include the prices paid for permits in the cost of reducing pollution.) Firm Firm A Firm B Firm C Initial Pollution Permit Allocation (Units of pollution) 2 22 2 Action Final Amount of Pollution Eliminated (Units of pollution) Cost of Pollution Reduction (Dollars)

Suppose the the government has set the trading price of a permit at $126 per permit. Complete the following table with the action each firm will take at this permit price, the amount of pollution each firm will eliminate, and the amount it costs each firm to reduce pollution to the necessary level. If a firm is willing to buy two permits, assume that it buys one permit from each of the other firms. (Hint: Do not include the prices paid for permits in the cost of reducing pollution.) Firm Firm A Firm B Firm C Initial Pollution Permit Allocation (Units of pollution) 2 22 2 Action Final Amount of Pollution Eliminated (Units of pollution) Cost of Pollution Reduction (Dollars)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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