supposed to utilities, peoples electric and municipal Energy, each produce 100 tons of pollution per year. The government has a goal of eliminating half the pollution, and, intern, provides 50 pollution permits to each utility. 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 illuminating 1 ton of pollution for peoples electric is $300 and the cost of eliminating a ton of pollution for municipal Energy is $150. The total cost of each utility eliminating 50 tons of pollution is $?
supposed to utilities, peoples electric and municipal Energy, each produce 100 tons of pollution per year. The government has a goal of eliminating half the pollution, and, intern, provides 50 pollution permits to each utility. 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 illuminating 1 ton of pollution for peoples electric is $300 and the cost of eliminating a ton of pollution for municipal Energy is $150. The total cost of each utility eliminating 50 tons of pollution is $?
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter10: Externalities
Section: Chapter Questions
Problem 10PA
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