The marginal private benefit (MPB) a firm receives for each of up to 8 tons of pollution is given in the table. It does not incur any marginal cost for any ton it emits, and rationally chooses how many of these 8 tons to emit. Each ton emitted imposes a societal cost of $53. MPB of each possible ton of pollution. 3 4 5 6 7 8 2 MPB $76 $63 $42 $24 $9 $0 $0 $0 Q 1 Assume a perfectly competitive market for tradable pollution permits, where each permit allows a firm to emit one ton of pollution. The firm currently has 6 pollution permits. If the market price for a pollution permit is $31.50, how many tons does the firm emit?

The marginal private benefit (MPB) a firm receives for each of up to 8 tons of pollution is given in the table. It does not incur any marginal cost for any ton it emits, and rationally chooses how many of these 8 tons to emit. Each ton emitted imposes a societal cost of $53. MPB of each possible ton of pollution. 3 4 5 6 7 8 2 MPB $76 $63 $42 $24 $9 $0 $0 $0 Q 1 Assume a perfectly competitive market for tradable pollution permits, where each permit allows a firm to emit one ton of pollution. The firm currently has 6 pollution permits. If the market price for a pollution permit is $31.50, how many tons does the firm emit?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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