The cost of controlling emissions at a firm rises rapidly as the amount of emissions reduced increases. Here is a possible model: C(q) = 4200+ 90q² where q is the reduction in emissions (in pounds of pollutant per day) and C is the daily cost to the firm (in dollars) of this reduction. Government will pay subsides in the amount of $450 per pound for each pound of pollutant removed (q). For example, if you can remove q=3 pounds of pollutant, you will receive a subsidy of $450*3. How many pounds of pollutant should the firm remove each day in order to minimize Net Cost (Cost minus subsidy)?
The cost of controlling emissions at a firm rises rapidly as the amount of emissions reduced increases. Here is a possible model: C(q) = 4200+ 90q² where q is the reduction in emissions (in pounds of pollutant per day) and C is the daily cost to the firm (in dollars) of this reduction. Government will pay subsides in the amount of $450 per pound for each pound of pollutant removed (q). For example, if you can remove q=3 pounds of pollutant, you will receive a subsidy of $450*3. How many pounds of pollutant should the firm remove each day in order to minimize Net Cost (Cost minus subsidy)?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The cost of controlling emissions
at a firm rises rapidly as the
amount of emissions reduced
increases. Here is a possible
model:
C(q) = 4200 +90q²
where q is the reduction in
emissions (in pounds of pollutant
per day) and C is the daily cost to
the firm (in dollars) of this
reduction. Government will pay
subsides in the amount of $450
per pound for each pound of
pollutant removed (q). For
example, if you can remove q=3
pounds of pollutant, you will
receive a subsidy of $450*3.
How many pounds of pollutant
should the firm remove each day
in order to minimize Net Cost
(Cost minus subsidy)?
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