answer the following based on the information provided **Reducing Pollution in Crabbyville: An Educational Case Study**The citizens of Crabbyville are concerned about the pollution caused by two companies: Happy Harry’s Hogs and Peppy Pippa’s Pigs. Each company currently emits 20 tons of pollution per year. To address this issue, we’ll explore the costs of reducing pollution through two different methods.1. **Direct Reduction Method** The government of Crabbyville mandates that each company must reduce pollution to 10 tons per year. The costs of cleaning the pollution are different for each company: - **Happy Harry’s Hogs**: $500 per ton - **Peppy Pippa’s Pigs**: $1,100 per ton *Calculate the Cost:* - **Happy Harry’s Hogs** needs to reduce 10 tons. Cost: $10 \text{ tons} \times \$500/\text{ton} = \$5,000$ - **Peppy Pippa’s Pigs** needs to reduce 10 tons. Cost: $10 \text{ tons} \times \$1,100/\text{ton} = \$11,000$ **Total Cost for Direct Reduction**: $\$5,000 + \$11,000 = \$16,000$2. **Tradable Pollution Permits** The government introduces tradable pollution permits, issuing each company 10 permits. Each permit allows for 1 ton of pollution and has a market value of $800. *Calculate the Cost:* - Companies can trade permits instead of reducing pollution directly. Since both will likely aim to minimize cost, they might decide to buy permits from one another based on cost efficiency. Possible transactions: - **Happy Harry’s Hogs** might prefer to buy permits instead of reducing pollution at a higher marginal cost beyond what’s required by permits. The comparative cost here involves strategic trading based on market permit value of $800. **Potential Costs with Permit Trading**: Assuming efficient trading: - If Happy Harry’s Hogs buys additional permits instead of reducing more pollution, calculating the trading expenditure: - Market strategies and decisions would finalize cost, typically less than direct reduction.This case study illustrates how different environmental policies and economic tools can impact the cost of reducing pollution. Analyzing these methods provides insight into strategic decision-making in environmental management.

The citizens of Crabbyville are complaining about the two companies in town, Happy Harry's Hogs and Peppy Pippa's Pigs, that are polluting the environment. Currently, each company emits 20 tons of pollution per year. Happy Harry's Hogs could clean the pollution at a cost of $500 per ton. Peppy Pippa's Pigs could clean the pollution but a cost of $1,100 per ton. 1. In an effort to reduce pollution, the government of Crabbyville decrees that from now on, each company has to reduce pollution to 10 tons per year each, or else! What is the cost of reducing pollution to the desired levels? Show your work. 500 10,000 2. After meeting with the cities Chief Economist, the government of Crabbyville decides to give each company 10 tradable pollution permits. Each tradable pollution permit allows the owner to emit one ton of pollution, and its market value is $800. What is the cost of reducing pollution to the desired levels? Show your work.

The citizens of Crabbyville are complaining about the two companies in town, Happy Harry's Hogs and Peppy Pippa's Pigs, that are polluting the environment. Currently, each company emits 20 tons of pollution per year. Happy Harry's Hogs could clean the pollution at a cost of $500 per ton. Peppy Pippa's Pigs could clean the pollution but a cost of $1,100 per ton. 1. In an effort to reduce pollution, the government of Crabbyville decrees that from now on, each company has to reduce pollution to 10 tons per year each, or else! What is the cost of reducing pollution to the desired levels? Show your work. 500 10,000 2. After meeting with the cities Chief Economist, the government of Crabbyville decides to give each company 10 tradable pollution permits. Each tradable pollution permit allows the owner to emit one ton of pollution, and its market value is $800. What is the cost of reducing pollution to the desired levels? Show your work.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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