The cost of reducing lead contamination of water for BigManufacture Inc. is shown in the table below. BigManufacture Inc currently releases lead in to the local waterways at a concentration of 5 parts per billion. The government regulations sets a limit to the lead pollution at 2 parts per billion accompanied by a $30,000 fine per year for each part per billion beyond the 2 part limit. What is BigManufacture Inc likely to do? Reduction of Lead Cost By 1 part per billion $20,000/year By 2 parts per billion $45,000/year By 3 parts per billion $80,000/year Group of answer choices Reduce lead pollution by 1 part per billion. Reduce lead pollution by 2 parts per billion. Reduce lead pollution by 0 part per billion. Reduce lead pollution by 3 parts per billion.

Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section30.3: Environmental Policy
Problem 1ST
Question

The cost of reducing lead contamination of water for BigManufacture Inc. is shown in the table below.

BigManufacture Inc currently releases lead in to the local waterways at a concentration of 5 parts per billion. The government regulations sets a limit to the lead pollution at 2 parts per billion accompanied by a $30,000 fine per year for each part per billion beyond the 2 part limit. What is BigManufacture Inc likely to do?

Reduction of Lead Cost
By 1 part per billion $20,000/year
By 2 parts per billion $45,000/year
By 3 parts per billion $80,000/year
Group of answer choices
Reduce lead pollution by 1 part per billion.
Reduce lead pollution by 2 parts per billion.
Reduce lead pollution by 0 part per billion.
Reduce lead pollution by 3 parts per billion. 
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