Suppose two utilities, People's Electric and Municipal Energy, each produce 400 tons of pollution per year. The govemment has a goal of eliminating half the pollution, and, in tum, provides 200 pollution permits to each ubility. A pollution permit is required to legally produce a ton of pollution. However, the two utilities are allowed to trade permits Suppose the cost of eliminating one ton of pollution for People's Electric is $500 and the cost of eliminating a ton of pollution for Municipal Energy is $550 The total cost of each utility eliminating 200 tons of pollution is 5 (Enter your response as a whole number) If the two utilities buy and sell permits with each other, then the minimum cost of eliminating 400 tons of pollution is $ Enter your response as a whole number)

Suppose two utilities, People's Electric and Municipal Energy, each produce 400 tons of pollution per year. The govemment has a goal of eliminating half the pollution, and, in tum, provides 200 pollution permits to each ubility. A pollution permit is required to legally produce a ton of pollution. However, the two utilities are allowed to trade permits Suppose the cost of eliminating one ton of pollution for People's Electric is $500 and the cost of eliminating a ton of pollution for Municipal Energy is $550 The total cost of each utility eliminating 200 tons of pollution is 5 (Enter your response as a whole number) If the two utilities buy and sell permits with each other, then the minimum cost of eliminating 400 tons of pollution is $ Enter your response as a whole number)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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