Time remaining: 00:09:21 Economics QA and QS are the pollution levels for Arrow and Solow Industries, respectively. Profits (benefits) associated with polluting activity, πi(i = A, S) are πA=10QA−0.5QA2 and πS=20QS−QS2. The marginal benefits (profits) for each firm are MBA=10−QA and MBS=20−2QS. 2.9 Suppose Arrow is located in a remote rural area, with very low pollution levels (marginal damage = 6), while Solow is located in an urban area, with other pollution sources and many more people exposed (marginal damage = 12). What is the efficient pollution allocation in this case?
Time remaining: 00:09:21 Economics QA and QS are the pollution levels for Arrow and Solow Industries, respectively. Profits (benefits) associated with polluting activity, πi(i = A, S) are πA=10QA−0.5QA2 and πS=20QS−QS2. The marginal benefits (profits) for each firm are MBA=10−QA and MBS=20−2QS. 2.9 Suppose Arrow is located in a remote rural area, with very low pollution levels (marginal damage = 6), while Solow is located in an urban area, with other pollution sources and many more people exposed (marginal damage = 12). What is the efficient pollution allocation in this case?
Chapter1: Making Economics Decisions
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Economics
QA and QS are the pollution levels for Arrow and Solow Industries, respectively. Profits (benefits) associated
with polluting activity, πi(i = A, S) are πA=10QA−0.5QA2 and πS=20QS−QS2. The marginal benefits (profits) for each firm are MBA=10−QA and MBS=20−2QS.
2.9
Suppose Arrow is located in a remote rural area, with very low pollution levels (marginal damage = 6), while Solow is located in an urban area, with other pollution sources and many more people exposed (marginal damage = 12). What is the efficient pollution allocation in this case?
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