The MD and MAC curves below represent damage and abatement cost functions fora firm liable for damages caused by its emissions. Suppose the firm cleans up itsemissions so as to minimize the sum of its abatement cost and compensationpayment. What would be its total cost? Copyrighted material. Not to be shared.$15MAC1025MDAEmissions(tonnes/month)

The total cost for the firm would be the sum of its abatement cost and compensation…

Answered: The MD and MAC curves below represent…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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$ MAC 69 0 K A. The total benefit of that decision is represented by area(s) B. The total cost of that decision is represented by area(s) M Suppose that emissions were to decrease from the unregulated level to the optimal level. C. The net benefit of that decision is represented by area(s) MD ◆ e ◆
Consider an industry with two firms that emit a uniformly mixed air pollutant (e.g., carbon dioxide). The marginal abatement cost functions for Firm 1 and Firm 2 are: MAC1 = 100 - e1 MAC2 = 100 - 4e2 Aggregate emissions for the industry are denoted as E = e1 + e2. 1. In an unregulated environment how many units of emissions does each firm emit? Firm 1’s unregulated level of emissions ____________ Firm 2’s unregulated level of emissions ____________ Total unregulated level of emissions ______________ Suppose a regulator has a goal of reducing the total level of emissions from the amount from the amount you answered in [1] to 25 units. The regulator would like to achieve the goal of 25 units of total emissions in a cost-effective way. To do so it issues 25 permits, 10 are given to Firm 1 and 15 are given to Firm 2. A firm can only emit a unit of pollution if they have a permit for that unit, otherwise they must abate. After the permits are allocated,…
109 83 35 38 T B a V Y D₂ 223 634 1374 Emissions Consider the figure above if the government imposes a cap and trade system with a cap of 925 units of emissions, then what areas reprosent the total cost of abatiment? E 925 W
Correct answer with explan in minimum 300 words
$ 15 7 0 Marginal Control Costs A 50 0 150 Marginal Damages 250 Emissions (tons) | What is the benefit to society from reducing emissions from 250 tons to 150 tons?
To model the effects of a carbon tax on CO2 emissions, policymakers study the marginal cost of abatement B(x), defined as the cost of increas- ing CO2 reduction from x to x +1 tons (in units of ten thousand tons- Figure 4). Which quantity is represented by the area under the curve over [0, 3] in Figure 4? B(x) ($/ton) 100 75 50+ 25- 1 3 Tons reduced (ten thousands) FIGURE 4 Marginal cost of abatement B(x).
Consider an industry with two firms that emit a uniformly mixed air pollutant (e.g., carbon dioxide). The marginal abatement cost functions for Firm 1 and Firm 2 are: MAC1 = 100 - e1 MAC2 = 100 - 4e2 Aggregate emissions for the industry are denoted as E = e1 + e2. [1] In an unregulated environment how many units of emissions does each firm emit? Firm 1’s unregulated level of emissions ____________ Firm 2’s unregulated level of emissions ____________ Total unregulated level of emissions ______________

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